ANUAL  FOR 


LIBRARY 


UNIVERSITY  OF  CALIFORNIA. 
Deceived 


Accessions  No.  3  I  8  ^t-.  Class  No. 


MANUAL 


FOR 


Building  ond  Loon  jlssoGiotions, 


EMBRACING 


The  Origin  and  History  of  Co-operative  Societies;  Objects  and 
Benefits  of  Building  Associations;    Plans  and  Methods  oj 
Organizing  and  Conducting  them;  Leagues;  Legislation; 
Constitution  and  By-laws;  Forms  and  Description  of 
Books,   Blanks,  and  Papers;   Interest  and  Dividend 
Tables;  Auditing  and  Supervision;  The  " National" 
Associations;  and  a  Comprehensive  Variety  of  Prac- 
tical and  Useful  Information  and  Suggestions. 


BY    HKNRY    S.    ROSBSNTHAL,. 


EDITION.    REVISED  AND  ENLARGED. 

j^^-^l^ 


HAI,  &  COMPANY, 
CINCINNATI, 
1891. 


COPYRIGHT,  1891,  BY  HENRY  S.  ROSENTHAI,. 

Si  ^  s  4- 


PREFACE  TO  SECOND  EDITION. 


IT  IS  with  pleasure  that  a  revised  and  enlarged 
edition  of  the  MANUAL  FOR  BUILDING  ASSOCIA- 
TIONS is  presented  to  the  public.  The  first  edition 
was  sent  forth  under  a  feeling  of  uncertainty.  It  was 
a  pioneer  in  a  new  field.  The  territory  was  one  of  rich 
promise,  but  as  yet  unexplored  and  unoccupied.  In 
presenting  what  purported  to  be  a  guide  to  this  region 
there  was  a  heavy  responsibility  assumed. 

But  all  that  was  expected  and  hoped  of  the  build- 
ing association  system  has  been  and  is  still  developing. 
The  building  association  is  now  a  fixed  institution, 
with  its  mission  and  its  limitations  well  defined.  It 
has  secured  universal  recognition,  and  is  working  out 
its  own  destiny.  It  is  not  yet  perfect,  but  under  the 
operation  of  evolutionary  processes,  theories,  plans, 
and  detail  operations,  are  steadily  progressing  and  im- 
proving. 

The  material  out  of  which  to  make  such  a  book  as 
this  has  increased  wonderfully  during  the  three  years 
which  have  elapsed  since  the  first  edition  was  issued. 
Numerous  books  on  the  subject  have  been  published, 
during  this  time.  Many  special  articles  on  the  subject 

(iii) 


iv  PREFACE. 

by  students  of  economical  questions  have  appeared  in 
leading  periodicals.  In  a  number  of  the  states  the 
leading  newspapers  now  carry  regular  building  associ- 
ation departments,  while  in  almost  every  newspaper 
in  every  state  articles  relating  to  this  subject  appear 
from*  time  to  time.  At  league  meetings,  conferences, 
etc.,  many  special  papers  have  been  presented  and 
discussed.  Comprehensive  and  valuable  statements 
have  been  prepared  from  time  to  time  for  presentation 
to  legislatures  in  connection  with  requests  for  legis- 
lation. Numerous  periodicals  devoted  to  this  subject 
have  been  established  in  different  parts  of  the  country, 
and  some  of  them  have  developed  into  very  able  pub- 
lications. In  several  states  official  bureaus  have  been 
established  for  the  supervision  of  the  work  of  associa- 
tions, and  the  collecting  and  tabulating  of  information 
in  connection  therewith.  From  all  these  sources 
there  is  now  an  aggregate  of  information  which  was 
unknown  when  the  MANUAL  first  appeared. 

It  has  been  a  source  of  gratification  that  so  little 
was  found  in  the  first  edition  for  criticism.  The 
book  met  with  almost  universal  commendation,  and 
has  been  accepted  and  adopted  generally  as  an 
authority  in  its  field.  In  the  present  edition  every- 
thing of  value  in  the  first  edition  has  been  retained. 
There  has  been  careful  revision  of  the  entire  text, 
correcting  and  elaborating  where  necessary,  omitting 
and  condensing  where  possible.  New  topics  that 
have  come  into  special  prominence  have  been  taken 
up  and  treated  in  full.  Among  these  may  be  men- 
tioned the  chapters  and  passages  devoted  to  Auditing, 
Leagues,  State  Supervision,  Legislation,  etc.  Such 
matters  as  these  have  grown  into  prominence  out  of 


PREFACE.  v 

the  necessities  of  the  system  itself.  The  magnitude 
which  the  operations  of  associations  have  reached,  and 
the  evident  immense  growth  that  awaits  the  system 
in  the  near  future,  make  these  matters  of  great  import- 
ance, and  hence  they  have  been  given  most  serious 
consideration. 

The  popularity  of  the  association  system  has  not 
only  developed  dangers  within,  but  has  invited 
dangers  from  without.  Unscrupulous  schemers  are 
seeking  to  take  advantage  of  its  popularity  and  the 
confidence  of  the  public  in  it  to  float  wild-cat 
schemes  of  different  kinds,  with  the  deliberate  pur- 
pose of  defrauding  and  robbing  the  inexperienced 
and  the  unwary.  Their  favorite  plan  is  to  establish 
what  they  call  a  "National"  building  associations  and 
to  invite  and  induce  unsuspecting  victims  in  all 
parts  of  the  country  to  turn  their  savings  over  to 
their  crafty  keeping.  Inasmuch  as  hundreds  of  thou- 
sands of  dollars  have  already  been  fraudulently 
collected  and  held  in  this  way,  and  loss  and  disaster 
have  come  in  consequence  to  many  thousands  of  hard- 
working and  worthy  people,  and  since  this  is  done 
under  the  guise  of  a  building  association  and  the 
genuine  and  legitimate  institution  is  thereby  brought 
into  disrepute,  it  has  seemed  worth  while  to  give  special 
attention  to  this  subject  also.  A  proper  understanding 
of  the  real  nature  of  the  principles  of  co-operation  as 
applied  in  a  building  and  loan  association  will  show 
every  one  the  impossibility  of  the  fulfillment  of  the 
promises  held  forth  by  the  managers  of  these  insti- 
tutions. 

There  are  numerous  other  minor  changes  and 
improvements  in  this  edition  which  will  be  noted  by 
the  careful  reader. 


vi  PREFACE. 

The  author  gratefully  acknowledges  his  obligation 
to  the  many  persons  and  sources  from  which,  directly 
or  indirectly,  he  has  derived  information.  This 
edition,  like  the  former  one,  has  been  prepared  in  the 
midst  of  pressing  business  duties  and  cares,  and  minor 
imperfections  may  have  resulted  in  consequence. 

H  S.  R. 

Cincinnati,   October  1891. 


PREFACE  TO  FIRST  EDITION. 


THE  RAPID  multiplication  and  the  remarkable 
development  of  building  and  loan  associations 
in  the  United  States  have,  given   rise   in   all 
parts  of  the  country  to  a  very  general  and  popular 
demand  for  specific  information  in  reference  to  proper 
methods  for  organizing  and  conducting  these  institu- 
tions.    So    numerous    and    urgent    have    been    the 
requests  coming  to  the  writer  for  information  of  this 
character  that  he   has  somewhat  reluctantly  under- 
taken the  preparation  of  this  book. 

The  building  association,  in  its  present  popular 
form,  is  such  a  recent  institution  that  the  literature 
in  connection  with  it  is,  most  of  it,  yet  to  be  written. 
The  organization  and  management  of  associations 
has  been  discussed  by  a  few  writers  incidentally  in 
connection  with  treatises  upon  general  co-operative 
work,  or  in  a  fragmentary  and  partial  way  through 
newspaper  and  magazine  articles,  or  in  a  local  way 
in  reference  to  the  work  of  associations  in  particular 
cities  or  states,  or  in  a  professional  way  in  works 
intended  and  fitted  only  for  the  use  of  the  legal  pro- 
fession. 

It  has  been  the  effort,  in  the  preparation  of  the 
present  work,  to  compile  from  all  the  various  sources 

(vii) 


viii  PREFACE. 

of  information,  and  to  record  from  a  somewhat  ex- 
tended personal  experience  and  observation  in  the 
actual  workings  of  associations,  a  manual  of  popular 
information  in  reference  to  this  subject. 

The  undertaking  is  a  difficult  one  from  the  fact 
that  the  plans  of  conducting  associations,  and  the 
laws  relating  to  them  in  the  different  states,  are  yet 
in  an  experimental  stage,  are  not  all  uniform,  and 
are  subject  to  constant  changes. 

The  greatest  care  has  been  exercised  to  make  all 
statements  accurate  and  practical.  The  facts,  con- 
clusions, and  suggestions  given  are  based  upon  legal 
enactments,  judicial  decisions,  and  approved  practice. 

It  has  been  the  purpose  to  make  the  book  simple 
and  comprehensive.  The  building  association  is  pre- 
eminently an  institution  of  the  common  people  and 
this  book  is  intended  for  their  use.  The  effort  has 
been,  to  include  all  the  information  of  a  general 
and  specific  character  which  is  necessary  to  enable 
intelligent  working-people  in  any  community  to 
organize  and  conduct  a  successful  association. 

Until  a  larger  experience  shall  have  discovered 
the  best  methods  for  conducting  associations  and  shall 
have  developed  greater  uniformity  in  the  legislation 
governing  them,  the  preparation  of  a  work  of  this 
kind  that  shall  be  entirely  complete  and  satisfactory 
will  be  impossible.  The  hope  may  be  expressed  that 
the  day  is  not  far  distant  when  the  same  principle  of 
co-operation  which  now  exists  among  members  of 
particular  associations  may  be  put  into  operation 
among  the  associations  themselves  resulting  in  the 
organization  of  local,  state,  and  national  leagues, 
through  which  uniformity  of  operation  and  legislation 


PREFACE.  ix 

may  be  speedily  secured,  thus  insuring  greater 
economy  and  better  security  in  the  management  of 
the  business  of  associations  and  greatly  multiplying 
their  popularity  and  usefulness. 

The  author  thankfully  acknowledges  his  indebted- 
ness to  Mr.  A.  A.  Winters,  Secretary  and  Attorney 
of  the  Mutual  Home  and  Savings  Association  of 
Dayton,  Ohio,  for  the  use  of  reports  and  circulars; 
to  Messrs.  Charles  Beuzer,  Henry  L,.  Smith,  and  W. 
L.  Davis,  some  of  Cincinnati's  best  known  secre- 
taries, for  the  use  of  dividend  tables;  to  Mr.  H.  A. 
Rattermann,  Secretary  of  the  Executive  Committee 
of  the  first  Building  Association  League  in  Hamilton 
County,  Ohio,  for  valuable  information  and  assistance ; 
to  Mr.  H.  H.  Muller,  and  other  secretaries  and  officers, 
for  various  practical  and  critical  suggestions ;  and  to 
Mr.  Oscar  B.  Todhunter  for  editorial  assistance.  Free 
reference  has  been  made  on  all  legal  questions  to  the 
very  valuable  work  of  Mr.  G.  A.  Endlich,  "The 
L,aw  of  Building  Associations." 

If  the  following  pages  successfully  impart  the  in- 
tended information  and  aid  in  bringing  to  individuals 
and  communities  the  advantages  which  follow  the 
establishment  of  building  and  loan  associations  and 
correct  methods  of  conducting  them,  the  author  has 
accomplished  his  purpose. 

HENRY  S.  ROSENTHAL. 
Cincinnati,  Ohio,  August,  1888. 


TABLE  OF  CONTENTS. 


CHAPTER  I. 
CO-OPERATIVE  SOCIETIES. 
What  is  co-operation  ? 
Origin  of  co-operative  societies. 
Result  of  conditions. 
Varieties. 

Co-operative  stores. 
Co-operation  abroad. 
In  the  United  States.  15—19 

CHAPTER  II. 

BUILDING  AND   LOAN  ASSOCIATIONS.  \ 

Objects  and  characteristics. 

Advantages  of  membership. 

Early  history. 

In  the  United  States. 

Benefits  and  influences. 

Probable  future.  20—34 

CHAPTER  III. 

\J 

FORMS  OF  ASSOCIATIONS. 


The  terminating  plan. 

The  serial  plan. 

The  perpetual  or  permanent  pi; 

The  "National"  plan. 


35—44 


CHAPTER  IV. 

BUILDING  ASSOCIATION  LEAGUES. 

Necessity  for  co-operation. 

How  to  form  a  league. 

What  a  league  can  do. 

League  membership. 

A  national  league.  45—50 

(x) 


TABLE  OF  CONTENTS.  xi 

CHAPTER  V. 

LEGISLATION. 

Its  necessity. 

Statistics. 

In  England. 

Provisions  of  the  English  law. 

Defects  in  the  English  law. 

In  the  United  States. 

Litigation.  51—57 

CHAPTER  VI. 

HOW  TO  ORGANIZE. 

Necessary  conditions. 

Preliminary  steps. 

Choice  of  name. 

Capital  stock. 

The  constitution. 

By-laws. 

Incorporation. 

Officers. 

Headquarters. 

Meetings. 

New  legislation.  58 — 67 

CHAPTER  VII. 

STOCK  AND   STOCKHOLDERS. 

Stock  and  stockholders. 

Increase  of  stock. 

Stock  as  property. 

Shares  transferable. 

Stock  payments  or  dues. 

Paid-up  stock. 

Other  facts  concerning  stock.  68 — 75 

CHAPTER  VIII. 

DUTIES  AND   RIGHTS   OF   MEMBERS. 

Membership. 

Duties  of  members. 

Fines  and  forfeitures. 

Rights  of  members. 

Corporate  rights  of  members. 

Rights  as  investors. 

Dividends. 

Right  of  withdrawal. 

Rights  of  borrowers. 

Duties  of  borrowers.  76 — 89 


xii  TABLE  OF  CONTENTS. 


CHAPTER  IX. 

LOANS  AND   SECURITIES. 

Sale  of  money, 

Premiums. 

Nature  of  a  loan. 

Mortgages. 

Other  securities. 

Assignment  of  stock. 

Sale  of  securities  ;  disposition  of  proceeds. 

Appraisement  of  real  estate.  90 — 98 

CHAPTER  X. 

CORPORATE  GOVERNMENT. 

The  corporate  meeting. 

General  meetings. 

Special  meetings. 

Management  of  corporate  meetings. 

Officers  :  their  election  and  general  powers. 

99—105 

CHAPTER  XI. 

EJECTION  AND   DUTIES   OF   OFFICERS. 

Officers  required. 

Elections. 

Duties  of  president  and  vice  president. 

Duties  of  secretary. 

Assistant  secretaries. 

Duties  of  treasurer. 

Duties  of  directors. 

Duties  of  trustees. 

The  attorney  :  his  appointment,  duties,  and  compensation, 

Bonds  of  officers. 

Responsibilities  of  officers. 

Remuneration  of  officers. 

Salary  of  directors. 

Salary  of  secretary.  106 — 126 

CHAPTER  XII. 

POWERS  AND   LIABILITIES. 

General  powers. 

Perpetual  succession. 

The  corporate  seal. 

Contracts  and  agents. 

Suits. 

Rules. 

Special  powers. 

Dissolution.  127—133 


TABLE  OF  CONTENTS.  xiii 

CHAPTER  XIII. 

PRACTICAL,  QUESTIONS  ANSWERED. 

Borrowing  money. 

Tables  :  loans  and  deposits. 

Contingent  or  reserve  fund. 

Undivided  profits. 

Mortgages  :  custody,  recording,  etc. 

Insurance  policies  as  collateral  security. 

Leaseholds. 

Taxes  and  assessments. 

Payment  of  dividends. 

Dues,  deposit  slips,  etc. 

Paying  off  shares.  134— T55 

CHAPTER  XIV. 
AUDITING:  ITS  PURPOSE. 
General  considerations. 
Purposes  of  auditing. 
Protection  of  corporate  interests. 
Protection  of  members. 
Statutory  and  constitutional  requirements. 
Economical,  labor-saving,  and  simple  methods. 
The  balance  sheet. 

The  auditor  the  representative  of  the  members. 
The  selection  of  an  auditing  committee. 

§ualifications  for  auditing, 
isqualification  of  auditors. 
Assistance  from  officials. 
Change  of  auditors. 
Compensation  of  auditors.  156 — 175 

CHAPTER  XV. 
AUDITING:  ITS  METHODS. 
Uniformity  impossible. 
Care  of  books. 
Special  hints. 
False  accounts. 
Errors  of  omission. 
General  outline. 
Share  contributions. 
Proving  of  cash  balance. 
Secretary's  cash  book. 
Treasurer's  cash  book. 
Members'  ledger. 
Withdrawals. 
General  ledger. 
Assets  and  liabilities. 
Auditor's  report  on  special  matters. 
Auditor's  certificate. 
Safety  insured. 
State  supervision.  176 — 196 


TABLE  OF  CONTENTS. 
CHAPTER  XVI. 

DIVIDEND  AND  INTEREST  TABLES. 

Calculation  of  dividends  and  interest. 

Application  of  profits. 

Illustration. 

Tables. 

Simple  interest. 

Division  of  profits  in  serial  associations. 

197—255 

CHAPTER  XVII. 

LEGAL  FORMS  FOR  ASSOCIATIONS. 

Necessity  for  correct  blank  forms. 

Specimen  blanks. 

Articles  of  incorporation  (Ohio). 

Subscription  list. 

Proxy  on  stock. 

Bond  of  officers  (Ohio). 

Mortgage  (Ohio). 

Mortgage  (Kentucky). 

Mortgage  clause  for  insurance  policies. 

Mortgage  collateral  note  on  shares  of  stock. 

Mechanic's  lien  (Ohio). 

Collateral  note  for  loan  on  pass  book. 

Attorney's  report. 

Certificate  of  paid-up  stock.  256 — 272 

CHAPTER  XVIII. 

REPORTS. 

Their  necessity. 

Legal  requirements. 

Preparation  and  publication  of  reports. 

Secretary's  balance  sheet. 

Specimen  reports.  273 — 282 

CHAPTER  XIX. 
General  suggestions. 
Book  account. 
Pass  books. 

Deposit  envelopes  and  slips. 
Necessary  books  and  forms. 
Building  association  supplies.  283 — 295 

APPENDIX. 
Constitution. 
By-laws. 
Rules. 


CHAPTER   I. 


CO- 


OPERATIVE   SOCIETIES. 


WHAT  is  CO-OPERATION  ? 

Co-operation  is  a  term  applied  to  a  system  of 
united  and  concurrent  effort  or  labor  for  some  par- 
ticular end.  The  specific  object  of  co-operation  is 
usually  of  a  commercial  or  industrial  character.  Co- 
operation as  a  system  consists  in  a  joint-stock  co-part- 
nery  on  ordinary  commercial  principles  with  limited 
liability  of  members.  By  the  adoption  of  wise,  pre- 
cautions and  prudent  methods,  and  through  the  inter- 
position of  judicious  legislation  defining  corporate 
powers  and  protecting  individual  interests,  the  prin- 
ciple of  co-operation  does  much  to  encourage  self- 
denial  and  thrift  on  the  part  of  individuals,  and  to 
develop  and  foster  the  material  interests  and  moral 
welfare  of  communities. 

ORIGIN  OF  CO-OPERATIVE  SOCIETIES. 

The  principle  of  co-operation  when  applied  in 
practice  results  in  the  organization  of  a  co-operative 
society.  Such  societies  are  almost  coeval  with  civil- 
ization itself.  They  have  existed  in  some  form  or 
another  in  every  enlightened  nation.  There  is  no 
very  well  authenticated  history  of  the  exact  form  and 

(15) 


16  MANUAL  FOR 

operations  of  the  first  co-operative  societies.  It  is 
evident  however  that,  as  a  rule,  they  existed  upon  a 
crude  and  restricted  basis.  It  is  only  within  modern 
times,  and  especially  during  the  last  half-century,  that 
they  began  to  assume  the  high  character  and  great 
importance  that  now  attaches  to  them. 

RESULT  OF  CONDITIONS. 

Wherever  co-operative  societies  have  existed  and 
for  whatever  purpose,  they  have  been  the  same  in 
essential  plan  and  nature.  They  spring  up  out  of  the 
same  conditions  and  minister  to  the  same  necessities 
and  achieve  the  same  results.  For  the  organization 
of  such  an  association,  there  must  be  a  considerable 
population,  made  up  chiefly  of  persons  of  small  means 
and  dependent  upon  their  daily  labor  or  business  for 
their  incomes.  The  people  must  possess  a  good 
degree  of  intelligence  and  similarity  of  interests  and 
tastes,  and  there  must  be  a  strong  element  of  mutual 
trust  and  dependence.  These  conditions  are  found 
to  the  greatest  extent  among  the  manual-laboring 
classes,  and  clerks,  shop  and  store  assistants,  etc.  It 
is  only  by  uniting  their  meager  earnings  that  these 
classes  can  slowly  raise  their  capital  to  an  effective 
bulk.  When  this  is  done  upon  an  economical  and 
prudently  devised  basis,  advantages  are  secured 
which  would  be  impossible  to  the  members  as  in- 
dividuals. The  great  bulk  of  population  in  all 
countries  is  made  up  of  people  of  these  classes  and 
conditions.  Their  necessities  everywhere  are  the 
same,  and  hence  it  is  not  a  matter  of  surprise  that 
we  find  much  similarity  in  the  efforts  made  to  meet 
these  necessities. 


BUILDING  ASSOCIATIONS.  17 

VARIETIES. 

Co-operative  organizations  have  been  formed  under 
a  great  variety  of  names  and  for  a  multiplicity  of 
purposes.  But,  whatever  the  name  and  whatever  the 
purpose,  their  essential  character  is  the  same.  Mem- 
bership in  the  organization  is  secured  upon  some 
equitable  basis  by  the  payment  of  shares.  The  traces 
of  such  organizations  which  are  found  in  the  history 
of  all  civilized  countries  indicate  that  they  have  been 
engaged  in  almost  every  variety  of  mercantile,  manu- 
facturing, and  industrial  pursuits. 

CO-OPERATIVE  STORES. 

One  of  the  oldest  and  most  familiar  forms  of  co- 
operation is  seen  in  the  establishment  of  societies 
for  the  purpose  of  distributing  articles  of  daily  con- 
sumption among  their  members.  A  store  is  estab- 
lished under  a  manager  and  assistants,  goods  of  the 
best  quality  are  purchased  on  favorable  terms,  and 
retailed  to  members  at  such  small  advance  on  cost 
price  as  is  sufficient  merely  to  pay  expenses  and  leave 
a  small  profit.  All  sales  are  for  cash.  Soundness 
in  the  articles  bought  and  comparative  cheapness 
alone  are  aimed  at.  There  is  little  trouble  in  book- 
keeping— no  loss  from  giving  credit.  The  customers 
are  their  own  store-keepers,  and  share  equitably  in 
the  advantages  and  profits  of  the  business.  Under 
proper  management,  and  by  holding  to  the  ready- 
money  system,  such  results  have  been  attained  as  to 
make  these  co-operative  stores  of  the  highest  value  to 

their  subscribers. 

jtZZ'^* 

TUP! 


i8  MANUAL  FOR 

CO-OPERATION  ABROAD. 

England,  more  than  any  other  nation,  has  been  the 
home  of  co-operation  in  its  varied  forms,  and  the 
whole  subject  has  had  an  amount  of  attention  in  that 
country  which  is,  as  yet,  unknown  here.  There  has 
been  elaborate,  though  not  scientific  and  philosoph- 
ical, legislation  upon  the  subject.  Many  able  writers 
and  statesmen  have  given  it  their  attention.  There 
is  a  large  amount  of  literature  connected  with  it,  in- 
cluding a  number  of  valuable  periodical  publications. 

The  English  co-operative  societies  are  of  great 
variety.  There  are  many  co-operative  stores,  supply- 
ing goods  for  members  at  but  a  nominal  advance  over 
first  cost.  Some  societies  engage  in  the  wholesale 
trade,  making  a  specialty  of  furnishing  goods  to  the 
co-operative  retail  stores.  Others  import  foreign 
goods  and  purchase  vast  quantities  of  domestic  pro- 
duce and  manufactures.  Some  are  engaged  in  manu- 
facturing, and  have  built  and  are  successfully  operating 
large  cotton  factories,  flour  mills,  and  other  such 
establishments,  which  compete  in  the  general  field  of 
manufacturing  enterprise.  Some  are  engaged  in 
banking  and  similar  financial  operations.  In  all  these 
societies  the  operators,  or  employes,  receive  regular 
wages  and  also  dividends  on  the  profits.  The  annual 
statistics  show  that  vast  sums  of  money  are  handled 
by  the  societies. 

In  Germany  co-operative  societies  are  numerous 
and  many  of  them  have  been  very  successful  as 
mercantile  and  manufacturing  enterprises.  Others 
are  engaged -in  a  variety  of  undertakings,  as  raining, 
laundrying,  real-estate  transactions,  etc.  But  those 
which  are  best  known  are  the  Sparkasse,  or  "People's 


BUILDING  ASSOCIATIONS.  19 

Banks."  These  have  been  established  for  more  than 
a  century.  They  are  under  very  rigid  governmental 
supervision.  They  pay  but  a  small  rate  of  interest 
on  deposits  and  loan  money  on  first  mortgage  bonds 
and  other  securities.  They  have  proved  of  the 
highest  value  to  the  German  people. 

IN  THE  UNITED  STATES. 

In  this  country  there  have  been  many  experiments 
in  the  way  of  co-operative  effort.  The  conditions 
here  have  been  different  in  many  respects  from  those 
in  the  older  countries.  Moreover,  there  is  a  lack  of 
the  many  years  of  experience  which  guides  co-opera- 
tive effort  in  Great  Britain  and  Germany.  Unfavor- 
able conditions,  inexperienced  management,  and  the 
lack  of  necessary  legal  restraints  and  official  super- 
vision, have  brought  failure  to  many  of  these  efforts 
at  co-operation.  However,  one  form  of  co-operation 
has  been  remarkably  successful  in  this  country.  This 
is  found  in  the  building  and  loan  associations  of 
which  it  is  the  purpose  of  this  work  to  treat.  The 
conditions  here  have  especially  favored  these  societies. 
In  consequence  of  this  the  building  associations  of 
this  country  now  compare  favorably  in  the  number  of 
organizations  and  members,  in  the  amount  of  capital 
they  control,  and  in  influence,  with  the  co-operative 
societies  of  various  kinds  so  long  established  in  the 
olcler  countries. 


CHAPTER  II. 


BUILDING  AND  LOAN  ASSOCIATIONS. 


OBJECTS  AND  CHARACTERISTICS. 

The  primary  or  fundamental  idea  out  of  which 
the  Building  and  Loan  Association  has  its  rise  is  that 
of  enabling  persons  with  limited  means  and  small 
incomes  to  become  the  owners  of  homesteads  or  real 
property.  It  is  this  idea  of  purchasing  real  estate 
and  building  homes  thereon,  that  has  given  to  these 
societies  the  name  by  which  they  are  now  so  generally 
known.  But  one  who  would  get  his  understanding 
of  the  practice,  work,  and  nature  of  a  building  and 
loan  association  from  its  name  only  would  have  very 
mistaken  ideas  in  regard  to  the  real  character  of  these 
organizations.  The  building  of  houses  may  be,  and 
generally  is,  a  part  of  the  system  of  the  associations, 
but  it  is  only  an  incidental  feature  of  their  work.  A 
more  significant  title  for  a  society  of  this  kind  would 
be  "A  Saving  and  Loan  Association."  The  use  of  the 
word  "Building''  in  the  name  of  the  associations  is 
traditional,  having  been  handed  down  from  the  first 
co-operative  societies  of  this  character  which  were 
known  as  "Building  Societies." 

The    Building   Association,   therefore,    while    not 

(20) 


MANUAL  FOR  BUILDING  ASSOCIATIONS.      21 

necessarily  a  Building  Association,  is  always  a  Saving 
Society  and  a  Loan  Association.  It  is  a  money-saving 
institution  in  that  a  necessary  part  of  its  system  con- 
sists in  the  regular  depositing  by  each  of  its  members 
of  a  certain  portion  of  his  earnings  or  income.  It  is 
a  monty-ma&inf  institution  in  that  the  funds  thus 
accumulated  are  so  used  and  applied  as  to  secure  for 
the  association  a  good  rate  of  interest.  It  is  a  money- 
loaning  institution  in  that  it  undertakes  to  advance 
or  loan  to  its  members  upon  acceptable  security  such 
amounts  of  money  as,  from  time  to  time,  their  neces- 
sities demand  and  their  circumstances  will  allow  them 
.  to  borrow.  It  is  a  popular  institution  among  that 
class  of  persons  who  compose  the  membership  of  such 
associations  since  it  is  thoroughly  mutual  and  demo- 
cratic in  its  character,  each  member  sharing  equitably 
in  all  its  advantages  and  privileges,  and  having  an 
equal  voice  in  its  management^ 

ADVANTAGES  OF  MEMBERSHIP. 

Persons  become  members  of  associations  for  a 
variety  of  purposes.  Some  seek  in  them  a  safe  de- 
positary for  their  slowly  accumulating  funds,  thinking 
them  safer  when  thus  deposited  than  if  retained  in 
their  own  possession.  Such  persons,  moreover,  find 
a  strong  inducement  to  become  members  in  the  fact 
that  the  association  provides  a  safe  and  convenient 
method  of  investing  their  small  means  at  a  good  rate 
of  interest.  Others  use  an  association  as  they  would 
a  savings  bank  for  the  purpose  of  accumulating  a 
fund  to  purchase  a  home,  to  embark  in  business,  or 
for  some  other  form  of  investment.  But  very  many 
persons  become  members  of  associations  because  of 


22  MANUAL  FOR 

the  privilege  which  the}'  thereby  obtain  of  anticipat- 
ing the  future  and  securing  the  immediate  use  of 
money  which  they  will  afterwards  gradually  replace 
through  depositing,  from  week  to  week,  or  month  to 
month,  as  the  case  may  be,  a  portion  of  their  regular 
earnings.  Associations  will  advance  to  this  class  of 
members  certain  sums  of  money,  the  payment  of 
which  in  installments  is  secured  by  the  pledge  of  the 
stock  of  the  member  and  the  mortgage  of  some  ap- 
proved real  estate,  or  the  depositing  of  government  or 
other  bonds  as  collateral  security. 

The  theory  of  the  Building  and  Loan  Association, 
therefore,  is  very  simple.  Money  is  collected  in  com- 
paratively small  sums  from  large  numbers  of  people, 
and  loaned  to  others  who  borrow  upon  real  property 
or  other  approved  security,  either  to  build  homes,  or 
to  enter  trade,  or  for  any  other  purpose.  With  per- 
sons of  the  class  among  whom  associations  are  most 
popular,  the  accumulation  of  means,  when  the}*  work 
alone,  is  so  slow  as  to  discourage  much  effort  in  that 
direction.  A  co-operative  society  in  the  form  of  a 
building  and  loan  association  furnishes  such  persons 
an  opportunity  for  regular  and  compulsory  saving, 
and  enables  them,  at  the  end  of  a  certain  period,  or  in 
anticipation  of  it,  to  purchase  and  to  hold  real  prop- 
erty in  their  own  names,  or  to  secure  special  advan- 
tages in  other  directions  impossible  to  them  under 
ordinary  circumstances.  Originally,  members  of  asso- 
ciations were  permitted  to  subscribe  only  fixed  sums 
at  stated  times.  Now,  in  the  best  conducted  associa- 
tions at  least,  every  facility  is  given  for  varying 
powers  of  investment,  and  to  find  a  place  for  capital, 
little  or  much,  and  entrance  and  withdrawal  are 


BUILDING  ASSOCIATIONS.  23 

equally  easy.  In  various  ways  the  policy  and  methods 
of  associations  have  been  varied  to  meet  the  conven- 
ience and  necessities  of  members  so  as  to  popularize 
them  and  to  render  them  more  practical  in  their 
operations. 

EARLY  HISTORY. 

Wherever  co-operative  societies  have  existed  we 
find  some  of  them  more  or  less  devoted  to  transactions 
in  real  estate,  and  to  assisting  their  members  to  be- 
come owners  of  real  property  and  to  erect  homes. 
Some  references  are  found  to  the  existence  of  a 
society  of  this  kind  in  London  as  early  as  1798,  but 
there  is  no  reliable  and  complete  record  of  its  history. 
Among  the  first  co-operative  building  societies  of 
which  we  find  an  authentic  and  full  account  is  the 
Union  Building  Association  founded  at  Greenwich, 
England,  in  January,  1809.  The  purpose  of  this 
organization,  as  declared  in  its  rules  and  regulations, 
was  the  raising  by  monthly  subscriptions  of  a  fund  to 
be  expended  in  building  houses.  These  houses,  as 
they  were  built,  were  deeded  to  the  different  members 
of  the  association.  The  membership  of  this  society 
was  restricted  to  the  number  of  fifty,  the  whole  num- 
ber of  shares  was  two  hundred  of  a  value  of  £>2l° 
each.  Payments  were  made  in  monthly  installments 
of  two  guineas  each.  A  member  was  subjected  to  a 
fine  for  default  of  payments  and  if  he  continued 
delinquent  the  money  already  paid  in  was,  under  cer- 
tain conditions,  forfeited  to  the  society.  Every  share 
in  this  association  represented  a  dwelling-house.  The 
houses  were  built  under  the  supervision  of  the 
;  society's  inspector  and  by  certain  tradesmen  specified 


24  MANUAL  FOR 

in  its  articles.  The  houses  were  distributed  among 
the  members  by  lot,  a  new  house  being  built  as  often 
as  the,  society  had  sufficient  funds.  From  the  time  a 
house  was  finished,  the  member  owning  it  paid  to  the 
association  five  per  cent,  per  annum  on  his  share  of 
,£210  until  the  close  of  the  society,  at  which  time 
each  member  should  have  paid  in  the  full  amount  of 
the  share  held  by  him.  Members  who  were  success- 
ful in  the  drawings  were  compelled  to  give  satis- 
factory security  for  the  money  advanced  them  for 
their  houses.  There  were  various  other  rules  con- 
nected with  the  operation  of  this  early  building  asso- 
ciation which  are  quite  interesting  but  which  can 
not  be  enumerated  here. 

Another  of  the  earliest  building  associations  of 
which  we  have  an  account  was  established  by  the 
Earl  of  Selkirk,  at  Kircudbright,  in  the  south  of 
Scotland,  in  1815.  The  Earl  of  Selkirk  was  a  gentle- 
man of  large  means  and  philanthropic  ideas.  He  is 
said  to  have  spent  considerable  time  and  study  in  per- 
fecting and  developing  the  scheme  of  this  society. 
The  organization  of  similiar  societies  gradually  ex- 
tended into  the  manufacturing  districts  of  England 
and  Wales.  Afterwards  they  were  established  in 
London,  and  soon  became  general  throughout  Great 
Britain.  In  the  year  1836,  they  had  become  of  such 
public  importance  that  an  act  of  parliament  was 
passed  affording  facilities  for  their  formation  and  pro- 
viding for  their  government  and  management.  Since 
that  period  they  have  had  a  flourishing  growth 
throughout  Great  Britain. 

Suchtassociations  have  also  long  been  in  existence 
in  other  countries,  particularly  in  Germany.  Owing 


BUILDING  ASSOCIATIONS.  25 

to  the  frugal  and  associative  character  of  the  German 
people  co-operative  efforts  of  this  kind  have  been  very 
popular  among  them,  not  only  in  their  native  country 
but  where  they  have  settled  in  communities  else- 
where. Associations  in  Germany  have  their  own 
peculiar  characteristics  and  have  been  remarkably 
successful  and  have  greatly  assisted  the  material  wel- 
fare of  their  membership. 

IN  THE  UNITED  STATES. 

Published  accounts  differ  as  to  the  first  establish- 
ment of  building  associations  in  the  United  States. 
Some  writers  claim  for  the  associations  of  this 
country  an  English  origin,  and  fix  the  date  in 
1836,  the  year  in  which  the  English  Parliament 
first  adopted  an  act  for  the  government  of  the 
building  societies  of  Great  Britain.  This  is  probably 
an  error.  Gustav  Korner  in  his  book,  "Das  deutsche 
Element  in  den  Vereinigten  Staaten,"  (The  German 
Element  in  the  United  States),  in  speaking  of  some 
of  the  influential  and  public-spirited  German  citizens 
of  Pennsylvania,  (pp.  73  and  74,)  says  of  Dr.  William 
Schmole:  "In  the  year  1846  he  returned  to  Philadel- 
phia. *  *  *  We  have  especially  to  thank  him  for  the 
establishment  of  the  first  building  association  in 
Philadelphia,  which  was  organized  under  the  name, 
"Amerikanischer  Darlehen  und  Bauverein,"  (The 
American  Deposit  and  Building  Association).  He 
also  was  the  founder  of  numerous  societies  of  this 
kind."  It  seems  to  be  well  established  that  the  first 
association  in  this  country  was  formed  in  Philadel- 
phia, and  the  passage  just  quoted,  fixes  the  date  in 
1846^  xDr.  Schmole,  through  his  brother  residing  in 


26  MANUAL  FOR 

Brooklyn,  N.  Y.,  succeeded  in  organizing  in  the  same 
year  an  association  in  that  city  under  the  name, 
"Brooklyner  Gegenseitiger  Darlehen  und  Bauverein," 
(The  Brooklyn  Mutual  Deposit  and  Building  Associa- 
tion). In  the  following  year,  1847,  through  his  friend 
Wolsieffer,  Dr.  Schmole  secured  the  organization  of 
an  association  in  Baltimore,  Md. 

Similar  organizations  appeared  soon  afterwards  in 
New  York  City,  Newark  and  Hoboken,  New  Jersey, 
Boston,  Mass.,  and  other  cities  of  the  North,  and, 
about  1850,  they  began  to  be  established  in  Charles- 
ton, S.  C.,  Savannah,  Ga.,  and  other  prominent  South- 
ern cities.  Associations  have  continued  to  spring  up 
from  time  to  time  throughout  the  country,  until  of 
late  years  they  have  become  numerous  in  almost 
every  state.  It  is  estimated  that  there  are  at  the 
present  time  nearly  6,500  associations  in  the  United 
States  with  a  membership  of  2,000,000,  and  an  author- 
ized stock  of  over  $750,000,000,  of  which  $500,000,000 
is  subscribed,  and  $250,000,000  paid  in. 

The  good  results  which  follow  the  establishment 
of  associations  are  well  illustrated  in  the  city  of  Phila- 
delphia, where  the  first  one  was  established.  Probably 
one-fourth  of  the  dwelling-houses  in  that  city  have 
been  built  through  the  agency  of  the  associations  and 
much  of  the  permanent  prosperity  of  the  city's  popu- 
'.  ition  is  doubtless  due  to  their  introduction.  It  is 
through  this  agency  that  the  city  has  attained  the 
proud  and  significant  title  of  "City  of  Homes."  Over 
60,000  workingmen  in  this  one  city  have  secured 
homes  through  these  associations. 

The  first  association  in  Cincinnati,  Ohio,  was 
established  July  8,  1868.  There  are  now  in  Hamilton 
County  400  associations,  of  which  325  are  within  the 


BUILDING  ASSOCIATIONS.  27 

corporate  limits  of  Cincinnati.  The  capital  stock  of 
these  400  associations  averages  $500,000  each,  and 
their  weekly  income  is  about  $150,000.  When  it  is 
remembered  that  the  greater  portion  of  the  money 
thus  collected  each  week  is  used  for  building  pur- 
poses, then  the  substantial  value  of  these  associations 
in  relation  to  the  general  growth  and  welfare  of  the 
city  is  easily  recognized.  It  is  highly  probable  that, 
were  it  not  for  the  provision  which  is  made  through 
the  associations  for  the  regular  laying  aside,  by  the 
payment  of  the  dues,  of  a  specified  portion  of  the 
weekly  earnings  of  the  members,  the  money  thus 
saved  would  be  spent  for  articles  of  ephemeral  or 
doubtful  value,  and  thus  would  be  in  the  nature  of  a 
permanent  loss. 

In  Dayton,  Ohio,  is  one  of  the  most  properous 
associations  in  existence,  called  "The  Mutual  Home 
and  Savings  Association."  It  was  organized  in  1871. 
Its  volume  of  business  is  so  great  that  it  has  been 
found  necessary  to  establish  a  general  office  and  to 
keep  it  open  during  all  the  business  hours  of  every 
working-day  in  the  week,  and  to  employ  a  corps  of 
clerks. 

From  Ohio,  associations  spread  jnto  Kentucky, 
Indiana,  Illinois,  and  other  states. 

In  one  or  two  states  building  associations  have 
proved  failures  and  their  formation  has  been  either 
prohibited  or  abandoned.  This  is  perhaps  owing  to 
improper  legislation  and  methods.  But  in  most  of 
the  cities  and  states  where  they  have  been  established 
they  have  continued  to  prosper  and  multiply  until 
their  number,  and  the  amount  of  capital  and  property 
under  their  control,  have  grown  enormously,  as  is 
seen  from  the  few  illustrations  given  above. 


28  MANUAL  FOR 

BENEFITS  AND  INFLUENCES. 

Building  and  loan  associations  are  now  recognized 
generally  as  an  important  factor  in  the  social  economy 
of  the  country.  Their  establishment  is  encouraged 
by  political  economists  and  philanthropists,  and  they 
are  guarded  and  fostered  carefully  by  legislation.  The 
large  middle  class  of  our  population,  among  whom 
they  principally  flourish,  recognize  them  as  a  means 
to  financial  advancement.  Their  beneficial  and 
economic  value  in  a  community  is  recognized  by  all 
classes  and  hence  they  are  encouraged  on  every  hand 
as  a  potent  factor  in  promoting  the  public  welfare. 
Briefly  summarized,  some  of  the  chief  advantages  of 
the  associations  may  be  stated  as  follows  : 

1.  The  character  of  an  association  is  such  that 
each  member  has  an  equal  voice  in  its  creation  and 
management,  and  shares  equitably  in  its  advantages 
and  profits. 

2.  A  co-operative  enterprise  of  this  character  fur- 
nishes the  best  method  by  which  workingmen,  and 
others  with  limited  incomes,  can  become  their  own 
capitalists,  thus  rendering  this  class,  in  a  measure  at 
least,  independent  of  other  capitalists. 

3.  An   association   furnishes   a  better  and   safer 
opportunity  than  any  other  plan  that  has  yet  been 
devised  for  securing  a  liberal  return  of  profits  from 

mall  and  periodical  savings. 

4.  By  means  of  associations  the  industrial  classes 
are   instructed   in   the   management   of    money    and 
property. 

5.  But  the  particularly  striking  feature  of  these 
associations  lies  in  the  fact,  that  they   enable  their 
members  to  secure  the  benefit   of  their   earnings   in 


BUILDING  ASSOCIATIONS.  29 

advance  by  loaning  to  the  members  funds  with  which 
to  build  homes  or  to  embark  in  other  enterprises, 
which  loans  they  repay  in  such  regular  weekly  or 
monthly  installments  as  their  earnings  will  allow. 

With  the  spread  of  intelligence  under  our  modern 
civilization  there  has  been  an  ever-increasing  effort 
on  the  part  of  the  working-classes  to  accumulate 
money.  In  order  to  become  in  any  measure  in- 
dependent, a  man,  dependent  upon  his  own  earnings 
for  his  income,  must  constantly  practice  industry  and 
frugality  with  intelligent  judgment  and  patient  per- 
severance. Out  of  the  many  schemes  and  systems 
that  have  been  devised  to  aid  workingmen  in  this 
effort,  none  have  proved  so  popular  and  successful 
as  building  and  loan  associations.  A  strong  point 
in  their  favor  is  in  their  purely  democratic  character 
and  the  mutual  nature  of  their  benefits.  In  other 
systems  of  saving,  the  management  of  the  enterprise 
is  vested  in  a  few  individuals  and  the  depositors  have 
little  more  to  do  with  it  than  the  mere  mechanical  act 
of  making  their  deposits  at  the  regular  periods.  In 
the  building  association  the  conditions  are  entirely 
different,  for  here  the  depositor  is  also  an  active 
manager  and  partner  in  the  enterprise.  He  has  his . 
voice  and  his  influence  in  its  entire  management  and 
direction.  There  is  no  separate,  preferred  class  to  be 
benefited  at  the  expense  of  the  other  members.  Even 
though  a  capitalist  becomes  a  member  and  subscribes 
for  a  large  number  of  shares  he  can  derive  no  benefit 
or  advantage  on  each  share  that  can  not  be  com- 
manded by  the  humblest  member.  He  must  enter 
upon  the  same  terms  exactly  that  are  required  of 
other  members  and  must  stand  upon  an  equal  footing 


30  MANUAL  FOR 

with  them  throughout.  The  stockholders  elect  their 
own  officers,  choosing  from  their  own  number  such 
persons  as  they  wish  to  clothe  with  authority  to  ad- 
minister the  affairs  of  the  association.  By  using  dis- 
cretion in  the  selection  of  intelligent  and  honest 
managers,  and  then  holding  them  to  strict  account- 
ability for  their  policy  and  management,  they  insure 
an  economical  and  faithful  administration  of  the  busi- 
ness of  the  association,  in  the  benefits  of  which  all  the 
members  participate. 

An  association  opens  to  a  member  an  opportunity 
for  profit  on  his  small  savings  which  he  can  not 
secure  in  any  other  direction.  The  deposits  of  all  the 
members,  when  combined  together,  form  a  sum  of 
money  of  such  proportions  that  it  commands  oppor- 
tunities and  advantages  in  the  way  of  investment  im- 
possible for  the  members,  acting  independently,  to 
vSecure  for  their  individual  savings.  Under  this  \ 
system,  workingmen  become  their  own  self-made  / 
capitalists.  The  combined  savings  of  those  working- 
men  who  do  not  need  their  money  form  a  sum  out  of 
which  other  workingmen  who  do  need  money  may 
supply  their  wants,  and  on  such  conditions  that  both 
borrowers  and  lenders  reap  a  mutual  benefit  from  the 
transaction.  They  are  thus  independent  of  private 
capitalists  and  save  for  themselves  the  tribute  they 
must  otherwise  pay  to  some  money-lender,  should 
they  desire  to  build  themselves  a  home,  to  embark  in 
business,  or  to  make  any  other  use  of  money.  More- 
over, as  is  seen,  the  association  itself  creates  the  op- 
portunity  for  the  profitable  use  of  capital.  The 
workingman,  trained  to  habits  of  economy  and  thrift 
by  the  influence  of  the  association,  and  roused  to  a 


BUILDING  ASSOCIATIONS.  31 

laudable  ambition  by  the  opportunities  which  it  sug- 
gests and  offers,  becomes  himself  a  borrower  and  in- 
vestor of  capital,  and  supplies  his  needs  for  money 
from  the  accumulated  capital  of  his  fellows. 

The  plan  upon  which  associations  are  operated 
insures  the  minimum  of  expense  in  handling  their 
funds.  At  the  same  time  the  opportunities  and 
sources  of  profit  are  unusual  and  can  not  be  secured 
to  the  .same  extent  except  through  a  co-operative 
effort  of  this  character.  Not  only  is  a  good  rate  of 
interest  to  be  expected  from  an  investment  in  the 
shares  of  a  well-conducted  association,  but,  through 
the  system  adopted  by  nearly  all  these  societies,  the 
members  receive  compound  interest  on  their  deposits. 
The  fines  and  forfeitures  enforced  against  delinquent 
members  constitute  another  source  of  profit  for  mem- 
bers prompt  in  their  payments.  The  premiums  on 
loans,  and  the  undeclared  dividends  on  withdrawals, 
are  additional  sources  of  profit.  The  amounts  real- 
ized from  these  sources  from  time  to  time,  like  the 
dues,  begin  at  once  to  draw  compound  interest.  It  is 
seen  therefore  that  the  building  association  furnishes 
unusual  opportunities  to  the  workingman  for  secur- 
ing profits  upon  his  small  savings,  opportunities 
indeed  which,  as  has  been  shown,  capitalists  them- 
selves can  not  secure,  except  upon  exactly  the  same 
terms  and  conditions. 

Ordinarily  a  man  earning  small  wages,  and  espec- 
ially one  having  a  considerable  family  dependent 
upon  him,  finds  great  difficulty  in  meeting  the  con- 
stant demands  made  upon  his  purse.  Too  often,  dis- 
couraged by  his  circumstances,  he  falls  into  a  mere 
routine  way  of  living,  satisfied  if,  from  week  to  week, 


32  MANUAL  FOR 

his  income  meets  his  expenses.  Occasionally,  how- 
ever, a  man  of  this  class,  more  ambitious  than  his 
fellows,  sets  about  some  plan  of  his  own  for  regular 
saving,  and  thereby  gradually  accumulates  a  sum  of 
money.  Whether  he  does  this  by  hoarding  it  in  some 
secret  receptacle  of  his  own,  or  by  depositing  it  in 
some  bank  or  savings  institution,  the  act  is  only  a 
routine,  mechanical  one  and  he  gains  thereby  nothing 
more  than  a  mere  addition  to  his  savings.  In  saving 
by  this  plan,  a  workingman  not  only  loses  the  oppor- 
tunity of  .securing  interest  or  profit  upon  his  savings, 
but  he  has  no  occasion  for  the  exercise  of  his  judg- 
ment, and  gains  no  knowledge  or  experience  that 
would  be  of  advantage  to  him  in  the  management  of  a 
sum  of  money  if  he  had  it.  Living  thus  from  day  to 
day  in  ignorance  of  the  various  means  of  accumulation 
and  investment  he  is  not  likely  to  make  much  advance 
in  this  direction.  But  should  he  succeed  through 
constant  hoarding  in  accumulating  finally  a  sum  of 
money  of  his  own,  when  he  undertakes  to  make  an 
investment  he  must  either  run  great  risk  of  losing  a 
portion  or  all  of  his  savings  through  his  ignorance  and 
inexperience,  or  he  must  become  dependent  upon  the 
skill  and  knowledge  of  others  in  the  management  of 
his  property.  This  lays  a  constant  tax  upon  him 
which  serves  to  cut  down  his  profits  to  some  extent. 
It  is  not  necessary  to  dwell  upon  the  advantages 
gained  by  workingmen  who  are  able  to  secure  homes 
of  their  own.  These  advantages  are  seen  in  the 
increased  happiness  and  contentment  of  families, 
their  greater  comfort  and  better  health,  increased 
educational  advantages  and  opportunities,  better 
economy  in  the  general  expenses  of  living,  and  that 


BUILDING  ASSOCIATIONS.  33 

independence  of  action  and  bearing  which  can  arise 
only  from  the  intelligent  and  regular  discharge  of  the 
responsibilities  and  duties  incident  to  this  natural 
and  beneficial  form  of  home  life. 

PROBABLE  FUTURE. 

The  rapidity  with  which  building  associations  have 
multiplied  is  remarkable,  and  the  number  already  in 
existence  is  extraordinary.  In  many  communities 
they  are  even  now  competing  successfully  with  the 
banks  in  the  amount  of  capital  they  control.  Wher- 
ever they  exist,  as  a  rule,  a  large  proportion  of  the  popu- 
lation is  identified  with  them  both  as  stockholders  and 
borrowers.  The  benefits  of  such  organizations  are  so 
apparent  and  their  popularity  is  so  well  established 
that  it  is  evident  that  they  are  but  beginning  to  occupy 
their  fields  of  usefulness.  In  view  of  the  steady  and 
rapidly  increasing  development  of  the  country  it 
seems  entirely  safe  to  predict  that  building  associa- 
tions will  increase  in  their  number  and  importance 
to  stupendous  proportions  in  the  near  future.  The 
growth  of  monopolies,  and  the  tendency  of  money  to 
centralization,  the  organization  of  syndicates  and 
" trusts"  which  create  false  values  for  real  estate  and 
many  of  the  necessaries  and  luxuries  of  life,  will 
inevitably,  more  and  more,  draw  the  masses  of  popu- 
lation into  co-operative  organizations  for  purposes  of 
self-defense  and  financial  security  and  advancement. 

The  wise  legislation  which  is  gradually  taking 
shape  in  the  different  states  will  do  much  to  increase 
the  popularity  of  associations.  The  almost  limitless 
adaptability  of  the  building  and  loan  association 
system  to  the  needs  of  crowded  and  growing  popula- 


34      MANUAL  FOR  BUILDING  ASSOCIATIONS. 

tions  is  only  beginning  to  be  fully  appreciated  in 
late  years.  Every  decade  witnesses  the  introduction 
of  improvements  into  the  system.  Certainly  the 
future  is  bright  with  promise. 


CHAPTER  III. 


FORMS  OF  ASSOCIATIONS. 


THE  TERMINATING  PLAN. 

The  building  association,  since  its  introduction  into 
the  United  States  fifty  years  ago,  has  appeared  in 
three  distinct  forms. 

The  first  associations  were  on  the  terminating 
plan.  These  were  useful.  They  have  now  largely 
disappeared,  having  given  way  to  more  popular  forms, 
though  a  few  are  still  in  existence. 

In  a  terminating  association  all  the  stock  is  issued 
as  of  one  date.  Such  an  association  is  organized  on 
the  presumption  that  all  the  stock  will  be  subscribed 
at  the  opening  meetings.  This,  however,  is  seldom 
done.  The  consequence  is  that  shares  sold  after  the 
first  meetings  must  be  sold  at  such  prices  as  to  make 
them  equal  in  value  to  those  already  issued.  To  do 
this  a  sum  must  be  charged  equal  to  the  amount 
already  paid  in  in  installments  by  the  subscriber  to 
the  original  shares.  If  the  regular  dues  on  shares 
should  be  one  dollar  per  week,  a  person  subscribing 
for  a  share  after  the  association  has  been  running  ten 
weeks,  must  pay  ten  dollars  for  the  share.  In  like 
manner,  if  the  association  hafe  been  running  for  a 

(35) 


36  MANUAL  FOR 

longer  period  he  must  pay  an  additional  dollar  for 
each  additional  week.  Moreover,  if  he  does  not  sub- 
scribe until  after  profits  have  been  declared,  he  must 
pay  such  additional  amount  on  his  shares  as  will  cor- 
respond to  the  earnings  of  the  original  shares  up  to 
that  time.  The  same  rule  holds  through  the  entire 
existence  of  the  association,  each  year  making  it  more 
difficult  to  enter.  After  an  association  organized  on 
this  plan  has  run  for  a  time,  it  is  impossible  for  many 
persons  who  would  gladly  become  members  to  raise  a 
sufficient  sum  of  money  to  pay  up  the  back  install- 
ments, the  initiation  fees,  the  accrued  profits,  and 
other  incidental  expenses.  In  its  practical  workings 
therefore,  an  association  organized  on  this  plan  is  not 
well  adapted  to  meet  the  conditions  of  that  particular 
class  of  persons  who  most  need  such  an  organization 
and  are  most  likely  to  be  benefited  by  it. 

In  a  terminating  association  all  the  shares  are,  of 
course,  at  all  times  of  equal  value.  Whenever  the 
total  amount  of  dues  paid  in  and  of  accumulated 
profits  equals  the  par  value  of  all  the  shares,  the  as- 
sociation terminates,  and  its  affairs  must  be  wound 
up.  Bach  stockholder  who  has  not  borrowed  his 
money  in  advance,  receives  the  full  value  of  his 
shares.  To  those  who  have  secured  their  money  in 
advance,  their  mortgages,  cancelled  and  receipted  in 
full,  are  returned. 

THE  SERIAL  PLAN. 

The  second  form  of  association  is  the  serial.  It  is 
a  development  of  the  terminating.  By  some  this  is 
called  the  "Philadelphia"  or  "Pennsylvania"  plan. 
In  this  form  the  stoder{is  issued  in  series,  as  first 


BUILDING  ASSOCIATIONS.  37 

series,  second  series,  and  so  on.  The  association 
usually  is  chartered  for  a  certain  number  of  years,  and 
with  a  specified  amount  of  stock.  Instead  of  selling 
all  the  stock  as  of  the  same  date  it  is  divided  into 
series,  one  series  being  sold  as  of  the  date  of  the 
beginning  of  the  first  term,  the  second  series  as  of 
the  date  of  the  beginning  of  the  second  term,  and  so 
on,  until  all  the  shares  are  sold.  The  serial  issue  may 
be  monthly,  quarterly,  semi-annually,  annually,  or 
otherwise,  according  to  what  may  be  fixed  as  the 
length  of  the  term.  At  the  end  of  the  first  term  the 
assets  of  the  association  are  divided  by  the  total 
number  of  shares  in  the  first  series,  and  the  value  of 
these  shares  at  this  time  is  thus  ascertained.  The 
second  series  is  then  issued  and  rated  at  par  value. 
The  shares  of  this  second  issue  run  in  the  same 
manner  as  those  of  the  first.  At  the  end  of  the 
second  term  the  sum  total  of  the  income  of  the  term 
is  divided  by  the  total  number  of  shares  in  both  series, 
and  the  equitable  withdrawal  value  of  shares  in  each 
series  is  ascertained.  Then  the  third  series  is  issued, 
and  so  on  to  the  end.  It  will  be  seen  that  under  this 
plan  the  older  the  series  the  greater  the  value  of  the 
shares.  In  some  serial  associations  members  may 
join  one  of  the  older  classes  by  paying  in  what  would 
be  the  total  amount  of  dues  and  a  proportionate  share 
of  the  profits,  that  is,  the  full  withdrawal  value  of  the 
shares  at  the  time  of  payment.  Sometimes,  also,  on 
the  issue  of  a  new  series,  old  shares  are  withdrawn 
and  their  value  taken  up  in  the  shares  of  the  new 
series. 

Usually,  after  an  existence  of  from  eight  to  ten 
years,  the  first  series  reaches  its  ultimate  value,  —  that 


38  MANUAL  FOR 

is  to  say,  it  matures.  The  members  holding  these 
shares  then  receive  their  full  value  in  cash,  and 
borrowing  members,  whose  mortgages  become  released 
with  the  maturing  of  the  series,  receive  their  mort- 
gages cancelled.  The  association  now  has  reached 
the  period  when  each  series  of  shares  must  be  paid  up 
as  it  matures.  If  it  is  running  successfully  it  secures 
an  extension  of  its  charter.  It  then  continues  issuing 
new  series  of  stock  at  the  beginning  of  each  term. 
If  its  full  amount  of  stock  has  been  subscribed  each 
new  series  now  takes  the  place  of  the  old  series  that 
has  matured,  so  that  the  total  number  of  shares 
thenceforth  continues  the  same. 

This  plan  may  be  compared  to  a  piece  of  ma- 
chinery which  consists,  say,  of  ten  cog-wheels,  which 
operate  one  grand  revolving  wheel.  These  ten 
smaller  wheels  are  numbered  from  one  to  ten  and  are 
inserted  one  after  another  in  their  regular  order. 
When  number  one  has  been  running  ten  years  it  is 
worn  out,  whereas,  number  two  has  been  running  but 
nine  years  and  has  one  more  year  to  run,  number 
three  has  been  running  eight  years  and  has  two  years 
to  run,  and  so  on.  When  number  one  wears  out  at 
the  end  of  ten  years  a  new  number  one  is  inserted  in 
its  place  which  will  run  ten  years.  At  the  end  of  the 
next  year  a  new  number  two  is  inserted,  and  so  on, 
perpetually.  And  thus  the  old  machine  is  kept  con- 
stantly in  repair  and  in  perfect  operating  form. 

It  will  be  seen  that  the  serial  association  is  a  great 
improvement  over  the  old  terminating  plan,  inasmuch 
as  it  is  much  more  practicable  and  adaptable  in  its 
operations  to  the  demands  likely  to  be  made  upon  it. 
It  provides  for  the  constant  introduction  of  new  mem- 


BUILDING  ASSOCIATIONS.  39 

bers  and  new  money,  and  has  in  it  the  elements  of 
permanency  and  perpetual  operation. 

This  plan  originated  in  the  city  of  Philadelphia, 
where  building  associations  have  had  their  greatest 
demonstration  of  practical  usefulness.  From  Phila- 
delphia it  spread  abroad  until  it  became  the  prevailing 
form  of  association  throughout  the  country.  The 
serial  associations  are  more  numerous  at  present  than 
any  other  form. 

THE  PERPETUAL  OR  PERMANENT  PLAN. 

As  the  building  association  became  better  under- 
stood and  more  popular  a  demand  arose  for  some 
form  of  association  more  pliable  and  adaptable  than 
either  the  terminating  or  the  serial  form.  A  new 
modification  then  appeared  which  has  been  styled 
the  perpetual  plan.  This  had  its  origin  in  Cincinnati 
and  Ohio,  where  it  has  been  very  successful  and 
popular,  so  much  so  that  it  has  spread  through  other 
states.  Under  this  plan  associations  are  granted 
perpetual  charters,  the  amount  of  their  capital  stock 
being  fixed  at  a  certain  sum.  They  are  allowed  to 
begin  operations  as  soon  as  a  certain  portion  of  the 
stock  is  subscribed.  After  the  association  is  in 
operation  new  members  are  allowed  to  enter  at  any 
time  on  an  equality  with  the  original  subscribers,  the 
stock  of  each  member  dating  from  the  time  of  his 
entry.  Thus  the  business  of  the  association  runs 
along  from  year  to  year  until  finally  all  the  stock  is 
subscribed,  when  an  additional  amount  of  capital 
stock  may  be  added.  After  a  time  the  shares  first 
issued  begin  to  reach  their  full  value.  As  they  thus 
mature  their  owners  draw  out  their  money — if  they 


40  MANUAL  FOR 

have  not  borrowed  it  in  advance — and  their  "shares 
are  cancelled  and  their  membership  ceases.  If  they 
have  borrowed  their  money  in  advance  their  mort- 
gages are  returned  to  them,  receipted  in  full.  If  a 
member,  whose  stock  has  thus  matured,  has  not 
borrowed  his  money  in  advance,  and  does  not  wish  to 
draw  it  out,  a  certificate  of -paid-up  stock  is  issued  to 
him,  and  he  leaves  his  money  in  the  association  as  a 
matter  of  investment. 

Under  this  plan  members  have  the  same  privileges 
of  withdrawal  as  of  entry.  They  may  withdraw  at 
any  time  by  complying  with  the  rules  of  the  associa- 
tion, receiving  their  equitable  share  of  the  assets. 
Experience  has  shown  that  it  is  possible  so  to  work 
out  the  plans  for  the  calculation  of  dividends,  pre- 
miums, interest,  etc.,  and  so  to  arrange  all  the  other 
details  of  the  operations  of  an  association,  as  to  be 
able  to  treat  each  share  equitably  upon  its  own  merits, 
without  in  any  way  interfering  with  the  interests  of 
any  other  share. 

This  form  of  association  is  a  still  farther  develop- 
ment of  the  original  plan.  It  adapts  the  operations 
of  such  a  co-operative  society  to  the  actual  necessities 
and  the  possible  emergencies  of  such  persons  as  need 
its  benefits.  In  a  sense  the  introduction  of  this  plan 
marked  the  beginning  of  a  much  more  general  popu- 
larity of  associations.  Since  its  introduction  they 
have  begun  to  spring  up  in  large  numbers  in  all 
sections.  It  seems  likely 'that  this  will  become  the 
general  form  which  building  and  loan  associations 
will  eventually  adopt.  Nevertheless  many  and  marked 
improvements  are  still  to  be  expected. 


BUILDING  ASSOCIATIONS.  41 

THE  "NATIONAL"  PLAN. 

The  building  association  has  been  recognized 
as  one  of  the  most  useful  institutions  for  the  welfare 
of  society  and  the  best  development  of  the  country, 
To  such  an  extent  is  this  true,  that  both  in  the  United 
States  and  in  other  countries  special  immunities  and 
privileges  have  been  conferred  upon  such  societies  by 
legislative  enactment.  The  restrictions  of  the  usury 
laws  have  been  removed  in  their  favor,  and  various 
other  privileges  have  been  accorded  them,  in  order  to 
promote  their  usefulness.  Under  such  legislative 
fostering  they  have  reached  their  remarkable  popu- 
larity and  prosperity. 

Out  of  their  success  itself  has  sprung  up  a  danger 
which  is  seriously  threatening  not  only  their  con- 
tinued usefulness,  but  their  very  existence.  A  build- 
ing association  is,  in  its  very  nature  a  mutual,  co- 
operative, democratic  society,  the  affairs  of  which  are 
managed  by  its  own  members  for  their  own  mutual 
interests.  It  is  a  money-saving  institution,  and  is 
not,  and  in  no  speculative  sense  can  be,  a  money- 
making  institution  for  some  of  its  members  at  the 
expense  of  others.  It  deals  only  with  members.  All 
that  comes  into  it  comes  from  members,  and  all  that 
goes  out  of  it  goes  to  members.  There  are  no  out- 
side "producers,"  and  there  are  no  outside  "bene- 
ficiaries." This  being  the  nature  of  these  societies  it 
is  apparent  that  they  must  be  local  in  their  organ- 
ization and  operations.  This  is  essential  in  order 
that  the  members  may  have  a  personal  knowledge  of 
one  another,  and  also  that  all  the  members  may  have 
a  personal  knowledge  of  all  the  affairs  of  the  associa- 
tion, and  may  participate  in  their  management. 


42  MANUAL  FOR 

Taking  advantage  of  the  popularity  of  the  local  or 
genuine  building  and  loan  association,  certain  finan- 
ciers (?)  have  sought  to  utilize  the  popular  confidence 
in  this  form  of  co-operation  for  their  own  benefit. 
They  have  instituted  what  they  have  called  "National" 
building  and  loan  associations.  They  represent  that 
their  institutions  are  a  development  of  the  regular 
local  building  society  into  national  proportions,  with 
a  corresponding  increase  of  privileges  and  advantages. 
The  sophistry  of  their  arguments  is  about  on  this 
wise :  If  a  local  association,  operating  in  a  single  com- 
munity in  one  state,  pays  a  profit  of  four  per  cent., 
will  not  a  "National"  association,  operating  in  say 
twenty  states,  be  able  to  increase  this  profit  in  propor- 
tion to  its  field  of  operations  ?  We  put  this  in  this 
extreme  form  in  order  to  emphasize  its  manifest  ab- 
surdity. 

In  the  nature  of  things  these  so-called  "National" 
associations  must  be  ephemeral.  They  cannot  last 
long  for  they  have  no  real  foundation.  Moreover, 
what  has  been  probably  the  most  damaging  to  their 
existence,  is  the  fact  that  a  number  have  been  con- 
ducted by  unscrupulous  people,  after  unscrupulous 
methods,  for  unscrupulous  purposes.  Nevertheless, 
at  the  present,  they  threaten  very  imminent  danger  to 
building  association  interests,  and  it  is  worth  while  to 
give  them  some  attention  in  a  publication  of  this 
character. 

I/ocal  building  societies  have  existed  in  England 
for  nearly  three-quarters  of  a  century.  There  are 
now  nearly  3000  such  societies  in  Great  Britain, 
with  annual  receipts  of  over  $150,000,000.  In  the 
United  States  there  are  at  present,  according  to 


BUILDING  ASSOCIATIONS.  43 

the  best  estimates,  over  6500  building  associations, 
with  a  membership  of  nearly  2,000,000,  and  estimated 
annual  deposits  of  over  $100,000,000.  These  figures 
show  to  what  stupendous  proportions  these  co-opera- 
tive home-building  societies  Rave  grown.  They  have 
proved  the  most  successful  economical  institutions  of 
the  world's  history.  So  conservative  and  careful  has 
been  their  management  that  less  than  one-tenth  of 
one  per  cent,  will  fully  cover  the  entire  losses  in  these 
institutions  during  the  past  decade. 

Now,  what  object  can  any  set  of  men  have  in 
attacking  directly  or  indirectly,  openly  or  insidiously, 
an  institution  with  such  a  record  as  this,  unless  it  be 
some  selfish  and  unscrupulous  one.  They  would  steal 
the  popular  name  of  building  association  to  cloak 
their  own  nefarious  purposes,  and  thus  disguising 
them  seek  to  transfer  the  public  confidence  in  this 
institution  to  their  own  unworthy  enterprises.  They 
may  say,  they  do  say,  that  they  have  no  attacks  to 
make  upon  ''local"  building  associations.  The  very 
fact  that  they  would  attempt  to  make  a  classification 
of  associations  is  an  attack  upon  the  genuine  institu- 
tion. A  building  association  can  not,  in  its  nature, 
be  anything  but  a  local  institution.  When  they 
represent  that  their  institution  is  of  a  national  char- 
acter, and  in  consequence  is  better  and  more  desirable 
than  the  local  society,  what  can  this  be  but  an  attack 
upon  the  local  form  of  co-operation  ?  And  since  the 
local  feature  is  an  absolutely  essential  element  of  a 
building  association,  any  discrimination  against,  or 
attack  upon,  this  feature  of  an  association  is  a  dis- 
crimination against  and  an  attack  upon  the  associa- 
tion itself. 


44      MANUAL  FOR  BUILDING  ASSOCIATIONS. 

We  would  not  hold,  we  do  not  hold,  that  there  is 
not  and  can  not  be  any  form  of  national  industrial, 
commercial,  or  financial  co-operation.  What  we  do 
maintain  is  that  in  the  very  nature  of  the  institution 
itself  there  cannot  be  such  a  thing  as  a  "National" 
building  association.  These  points  will  hold  against 
the  so-called  "National"  building  and  loan  associa- 
tions : 

1.  They  are  not  mutual  in  their  character,   for 
some  members  profit  at  the  expense  of  others,  and  out 
of  proportion  to  their  individual  holdings. 

2.  They  are  not  democratic  or  mutual  in  their 
management,  from  the  fact  that  the  officers  perpetuate 
themselves  in  office,  and  fix  their  own  remuneration, 
and   the   stockholders  are  not  advised  of  the   trans- 
actions of  the  concern,  and  do  not  and  can  not  partici- 
pate in  its  management. 

3.  They  are  not  economical  and  conservative  in 
their  management  from  the  fact  that  their  expenses 
consume  a  very  large  percentage   of  their  receipts ; 
they  are  not  open  in  their  character,  for  their  business 
is  conducted  secretly   and  not  reported  in  detail  to 
their  members  or  to  the  public. 


CHAPTER   IV. 


BUILDING  ASSOCIATION  LEAGUES. 


NECESSITY  FOR  CO-OPERATION. 

The  necessity  for  greater  uniformity  in  the 
methods  of  associations  has  led  to  various  attempts  to 
secure  some  plan  for  more  concurrent  and  harmoni- 
ous action  among  them.  The  most  promising  and 
successful  attempts  in  this  direction  are  seen  in  efforts 
to  establish  leagues,  in  which  representatives  of  asso- 
ciations can  meet  for  consultation  and  exchange  of 
views,  and  the  perfecting  of  the  best  plans  of  opera- 
tion for  associations. 

In  the  older  countries,  where  co-operative  societies 
have  been  long  in  existence,  co-operation  among  the 
societies  themselves  is  better  established  than  it  yet  is 
in  the  Unite'd  States.  But  already  in  this  country  the 
necessities  growing  out  of  the  circumstances  have 
compelled  building  societies  to  unite  for  their  own 
better  protection  and  development.  In  quite  a  num- 
ber of  states  building  association  leagues  are  already 
in  existence,  and  others  are  in  process  of  organization. 

(45) 


46  MANUAL  FOR 

How  TO  FORM  A  LEAGUE. 

Inasmuch  as  the  organization  of  state  leagues  is  a 
matter  claiming  a  great  deal  of  attention  at  the 
present  time,  and  is  likely  to  continue  to  do  so  for 
some  time  to  come,  it  may  be  well  to  give  some  more 
or  less  specific  suggestions  as  to  how  to  organize  and 
conduct  a  league. 

It  will  be  necessary  for  individuals  interested  in 
the  promotion  of  building  associations  to  take  the 
initiative.  These  should  confer  together  by  letter, 
or  otherwise,  and  should  agree  upon  the  best  man 
to  lead  the  movement.  Then  he,  with  others, 
should  issue  a  call  for  a  meeting  of  representatives 
of  associations  for  the  purpose  of  establishing  a 
state  league.  Those  attending  this  convention  should 
come  formally  or  informally  representing  their  re- 
spective associations.  It  is  the  better  plan  that  the 
call  for  the  convention  be  issued  some  time  previ- 
ous to  the  date  of  its  meeting,  so  that  the  matter 
can  be  brought  before  the  directors  of  different  asso- 
ciations and  they  can  arrange  to  send  regularly  ap- 
pointed delegates  and  to  pay  their  expenses.  This, 
of  course,  would  tend  to  make  the  meeting  larger  and 
more  representative.  Again,  where  the  attendance  is 
of  a  purely  voluntary  character,  it  may  not  be  the 
most  desirable  persons  who  will  attend  and  take  a 
prominent  and  influential  part  in  the  proceedings. 
Associations  should  send  to  such  a  meeting  their 
most  experienced  and  best  informed  members  so  that 
their  action  may  be  wise  and  conservative.  When 
the  convention  meets  it  should  effect  a  temporary 
organization  by  the  appointment  of  a  chairman  and  a 
secretary  and  a  committee  on  business.  An  informal 


BUILDING  ASSOCIATIONS.  47 

session  should  then  be  held  for  the  presentation  of 
matters  and  suggestions  by  the  different  delegates 
present  which  should  be  referred  to  the  committee  on 
business.  The  session  should  then  adjourn  to  give 
the  committee  on  business  an  opportunity  to  arrange 
a  program  for  the  proper  consideration  and  disposi- 
tion of  the  subjects  presented,  and  any  other  matters 
that  may  come  before  the  meeting. 

The  proceedings  at  the  further  sessions  of  the 
convention  must  be  governed  by  circumstances.  As 
to  the  final  organization  of  the  league  two  or  three 
things  may  be  said. 

1.  The   organization   should   be   simple.     Not   a 
cumbrous  but  an    effective   machine   is   what   is   re- 
quired. 

2.  The  constitution  and  by-laws  slvnild  be  brief 
and  to  the  point,  specific,  and  at  the  same  time,  com- 
prehensive.    They   should  be  drawn   with  the  sole 
idea  of  giving  practical   effectiveness  to  the   organi- 
zation. 

WHAT  A  LEAGUE  CAN  Do. 

The  work  of  a  league  will  divide  itself  into  two 
branches  : 

i.  The  primary  purpose  in  the  organization  of  a 
league  will  be  to  secure  legislation  favorable,  and  to 
prevent  legislation  inimical,  to  the  interests  of  associa- 
tions. In  pursuance  of  this  purpose  at  the  meetings 
of  the  league  matters  for  consideration  can  be  sent  up 
from  associations  in  all  parts  of  the  state  and  working 
under  divers  circumstances.  The  league  delegates, 
representing  the  whole  building  association  interests 
of  the  state,  can  consider  these  matters,  specifically 


_; 


OF 


48  MANUAL  FOR 

and  arrange  to  have  them  formulated  in  the  most 
desirable  way.  A  league  being  established,  it  is 
possible  to  send  a  delegation  representative  of  building 
association  interests  before  the  legislature  on  short 
notice  at  any  time,  whereas,  in  the  absence  of  such  a 
league,  matters  of  grave  importance  must  go  by  de- 
fault, and  association  interests  suffer  in  consequence, 
because  it  is  the  business  of  no  particular  person  to 
represent  them  before  the  legislature. 

2.  A  second  matter  of  great  importance  to  asso- 
ciations is  the  opportunity  which  the  existence  of  a 
league  affords  for  the  discussion  of  all  questions  con- 
nected with  the  practical  management  of  associations. 
As  is  well  known  there  is  not  uniformity  of  method 
in  disposing  of  various  matters  in  different  associa- 
tions. In  some  associations  one  phase  of  the  business 
may  be  handled  by  a  better  method  than  in  another. 
Delegates,  coming  together  for  the  discussion  of  these 
practical  questions,  may  learn  much  from  one  another 
which  will  be  greatly  to  the  advantage  of  their  respec- 
tive associations. 

There  are  many  other  incidental  advantages  which 
may  arise  from  the  establishment  and  the  regular 
meetings  of  such  a  league  which  will  readily  suggest 
themselves  to  any  thoughtful  person.  Such  Con- 
gresses have  become  a  striking  feature  of  co-operative 
work  in  England. 

LEAGUE  MEMBERSHIP. 

Of  course  the  work  of  a  league  can  not  be  carried 
on  without  some  expense.  Nevertheless,  if  a  league 
is  properly  organized  and  managed,  the  expenses  need 
not  be  heavy.  To  meet  these  expenses  each  associa- 


BUILDING  ASSOCIATIONS.  49 

tion  which  becomes  a  member  of  the  league  should 
pay  a  small  fee.  So  far  in  the  history  of  leagues  this 
fee  has  usually  been  fixed  at  five  dollars  annually. 
In  case  additional  funds  are  necessary  it  is  easy  to  in- 
crease the  annual  dues  or  to  make  some  other  pro- 
vision for  raising  them. 

It  is  very  important  that  every  association  should 
become  a  member  of  its  state  league.  A  state  league 
is  charged  with  protecting  the  interests  of  all  the 
associations  in  the  state.  In  order  that  this  work 
may  be  done  intelligently  all  the  associations  should 
be  represented  in  the  league  in  order  that  their  re- 
spective needs  may  be  properly  presented  and  fully 
understood.  The  league,  like  the  associations  them- 
selves, is  a  mutual  and  co-operative  institution.  Asso- 
ciations, therefore,  should  identify  themselves  with  it 
so  as  to  make  it  co-operative  in  fact  as  well  as  in 
name.  Again,  since  the  league  protects  the  interests 
of  every  association  in  the  state,  each  association 
should  bear  its  proper  share  of  the  expenses  and 
labor  connected  with  the  work  of  the  league.  It  is 
not  fair  where  there  are,  say,  three  hundred  or  four 
hundred  associations  in  a  state,  for  twenty  or  thirty 
of  them  to  bear  the  full  expense  and  labor  of  looking 
after  legislation,  perfecting  methods,  and- so  on. 

It  ought  to  be  borne  in  mind  also  that  while  a 
league  is  an  organized  body  its  work  must  be  done  by 
individuals.  While  the  expenses  of  delegates  to  the 
league  meetings  are  usually  borne  by  the  associations 
they  represent,  yet  these  individual  delegates  must 
lose  their  time  from  their  own  private  business,  and 
incidentally  are  put  to  no  little  inconvenience  and  oft- 
times  expense.  Their  work  if  well  done  is  laborious 


50      MANUAL  FOR  BUILDING  ASSOCIATIONS. 

and  painstaking.  These  things  are  especially  true  of 
the  officers  of  leagues.  Under  these  circumstances 
they  should  certainly  have  the  cordial  and  unanimous 
support  of  the  whole  interest  which  they  represent, 
thus,  in  a  measure,  lightening  their  burdens  and  giv- 
ing them  such  a  standing  and  prestige  as  will  make 
them  far  more  influential  in  securing  the  ends  for 
which  they  labor. 

A  NATIONAL  LEAGUE. 

Sooner  or  later  a  national  league  will  be  organ* 
ized  to  represent  the  entire  building  association  in- 
terests of  the  country.  Through  the  system  of  co- 
operation among  associations  thus  brought  about 
correct  statistical  and  other  information  will  be 
collected  and  disseminated,  methods  of  organizing 
and  managing  will  be  perfected  and  simplified,  greater 
economy  and  security  will  be  secured,  legislation  will 
be  improved  and  made  more  uniform,  and  the  in- 
terests of  associations  and  their  members  greatly 
enhanced.  The  advantages  and  necessities  of  such 
a  method  of  co-operation  are  so  evident,  and  the  cost 
would  be  so  slight,  that  it  would  seem  to  be  only  a 
matter  of  a  short  time  until  it  will  be  established. 


CHAPTER  V. 


LEGISLATION. 


ITS  NECESSITY. 

The  necessity  for  judicious  legislation  for  the  con- 
trol of  building  associations  is  apparent.  Immense 
interests  to  citizens  and  the  state  are  involved.  If  the 
associations  are  of  value  at  all,  they  are  closely  identi- 
fied with  the  material  and  moral  welfare  of  communi- 
ties. It  is  of  the  highest  importance  therefore  that 
their  corporate  rights  and  duties  should  be  clearly 
denned  by  statute,  and  that  the  individual  rights  of 
members  should  be  carefully  guarded,  and  their  duties 
and  privileges  specifically  defined. 

The  rapidity  with  which  associations  have  multi- 
plied, and  the  immense  aggregate  which  the  business 
they  transact  has  reached,  have  caused  them  more  and 
more  to  attract  the  attention  of  the  various  state  legis- 
latures. The  many  different  people  that  are  chosen 
to  these  bodies,  representing  so  many  different  sec- 
tions and  varied  interests,  with  many  ideas  and  diverse 
views,  and  not  a  few  of  them  with  no  knowledge  of  or 
experience  in  building  associations,  establish  condi- 
tions out  of  which  have  sprung  up  legislation,  some 
of  which  is  wise,  —  and  some  of  which  is  otherwise. 


52  MANUAL  FOR 

Many  conservative  and  useful  laws  have  been  enacted 
which  have  materially  promoted  the  interests  of  the 
country.  On  the  other  hand  there  has  been  no  little 
patch-work  and  superficial  legislation  which  some- 
times has  proved  detrimental  to  the  cause  it  was 
intended  to  benefit.  The  very  fact  of  the  growing 
popularity  of  associations  has  made  many  of  our 
statesmen  a  little  too  ambitious  to  legislate  for  their 
interests,  which  has  resulted  in  the  introduction  and 
adoption  of  various  impracticable  and  unwise  meas- 
ures. But  the  time  has  arrived  when,  through  expe- 
rience, the  people  generally  are  becoming  better 
informed  as  to  the  real  nature  and  functions  of 
associations.  The  light  of  the  press  is  also  turned 
upon  the  subject.  The  establishment  of  state  leagues 
has  made  it  possible  to  reach  legislators  in  a  formal, 
representative,  and  influential  manner.  Legislators 
are  wiser  than  formerly.  If  an  improper  measure  is 
now  introduced  into  any  legislature  there  are  faithful 
and  intelligent  guardians  of  the  interests  of  the  asso- 
ciations, either  within  the  legislature  or  without,  who 
will  quickly  turn  the  light  upon  it  and  expose  it. 

What  is  most  needed  in  some  states,  perhaps,  is 
not  more  legislation,  but  less,  and-  of  a  better  and 
more  practical  character.  Uniformity  is  also  some- 
thing to  be  greatly  desired,  that  is  to  say,  such  uni- 
formity as  is  possible  and  proper  according  to  the 
varied  circumstances  in  the  different  states  and  com- 
munities. 

STATISTICS. 

One  of  the  most  promising  features  of  the  building 
association  movement  is  seen  in  the  fact  of  the  con- 
tinued inquiry  for  statistics  giving  reliable  informa- 


BUILDING  ASSOCIATIONS.  53 

tion.  This  inquiry  for  specific  knowledge  of  this 
character  has  already  induced  a  number  of  the  states 
to  arrange  for  the  collection  and  publication  of  full 
statistics  and  information  in  reference  to  associations. 
Among  the  states  to  lead  off  in  this  work  were  Massa- 
chusetts, New  Jersey,  New  York,  Illinois,  Indiana, 
Nebraska,  Kansas,  Maine,  Ohio,  and  other  states.  It 
should  not  be  long  until  all  the  states  have  bureaus 
of  building  association  statistics.  It  is  very  probable 
and  desirable  that  a  national  bureau  of  this  character 
be  established  at  an  early  day. 

IN  ENGLAND. 

The  success  of  the  Greenwich  Union  Building  v 
Society,  and  of  other  early  organizations  of  the  kind 
in  England,  soon  attracted  the  attention  of  the  govern- 
ment. So  important  was  the  movement  indicated  by 
these  organizations  considered,  that  in  the  year  1836, 
an  act  of  parliament  was  passed  giving  building 
associations  legal  recognition,  providing  ample  oppor- 
tunities and  inducements  for  their  formation,  and 
making  full  provision  for  the  protection  of  their  mem- 
bers. English  societies  operated  under  this  act  until 
1874,  when  a  new  act,  very  liberal  and  elaborate  in  its 
provisions,  was  passed. 

PROVISIONS  OF  THE  ENGLISH  LAW. 

The  English  law  seems  to  have  been  the  basis 
upon  which  most  of  the  legislation  in  this  country 
relating  to  building  associations  is  founded.  A  brief 
synopsis  of  its  provisions  will  therefore  be  of  interest. 
It  declares  that  any  number  of  persons  may  establish 
a  society,  either  terminating  or  permanent,  for  the 


54  MANUAL  FOR 

purpose  of  raising,  by  the  subscriptions  of  the  mem- 
bers in  stock  or  funds,  means  for  making  advances  to 
members  out  of  the  funds  of  the  society  upon  security 
on  freehold,  copyhold,  or  leasehold  estate  by  way  of 
mortgage ;  and  any  society  under  the  act  shall,  as  far 
as  it  is  necessary  for  the  said  purpose,  have  power  to 
hold  land,  with  right  of  foreclosure,  and  may  from 
time  to  time  raise  funds  by  the  issue  of  shares  of  one 
or  more  denominations,  paid  either  by  periodical  or 
other  subscriptions,  and  with  or  without  accumulating 
interest,  and  may  repay  such  funds,  when  no  longer 
required  for  the  purpose  of  the  society.  Societies 
are  empowered  to  receive  deposits  or  loans  from 
members  or  other  persons,  corporate  bodies,  joint- 
stock  companies,  or  terminating  building  societies. 
Societies  established  under  or  adopting  the  act  of 
1874  are  bodies  corporate,  having  perpetual  succession 
and  a  common  seal,  thus  dispensing  with  the  cum- 
brous and  inconvenient  system  of  trusteeship.  The 
rules  must  specify  the  society's  name  and  place  of 
meeting,  terms  of  withdrawal  and  repayment,  manner 
of  alteration  of  rules,  the  appointment,  remuneration, 
and  removal  of  officers,  provisions  as  to  general  and 
special  meetings,  and  the  seUlement  of  disputes, 
custody  of  seal,  mortgage  deeds  and  securities,  powers 
of  directors  and  other  officers,  fines,  and  modes  of 
dissolution.  Societies  may  unite  with  others.  One 
society  may  transfer  its  engagements  to  another. 
They  may  purchase,  build,  or  hire,  or  take  on  lease, 
any  building  for  conducting  their  business.  Minors 
may  be  members,  but  can  not  vote  or  hold  office 
during  non-age.  Accounts  are  to  be  furnished  to 
members  annually.  The  societies  are  exempt  from 


BUILDING  ASSOCIATIONS.  55 

stamp  duties,  except  those  upon  mortgages.  Receipts 
indorsed  upon  mortgages  are  sufficient  discharges 
without  conveyance. 

The  law  of  1836  provided  for  the  appointment  of  a 
special  board  of  commissioners  to  superintend  the 
work  of  the  Loan  Fund  Societies  of  Ireland.  This 
was  called  the  L,oan  Fund  Board.  All  societies  had 
to  register  with  and  report  to  this  board,  whose  duty 
it  was  to  see  that  the  societies  conducted  their  affairs 
according  to  the  provisions  of  the  new  law. 

DEFECTS  IN  THE  ENGLISH  LAW. 

Upon  analysis  it  will  be  found  that  the  English 
acts  governing  building  societies  are  not  philosophical 
and  harmonious  in  their  construction.  They  were 
rather  spontaneous  and  sporadic  in  their  origin, 
springing  up  from  time  to  time  out  of  necessity,  or  to 
meet  some  special  interest.  It  would  not  be  in  place 
here  to  attempt  an  analysis  of  the  English  statutes, 
and  to  point  out  their  contradictory  and  inharmonious 
provisions.  It  will  be  sufficient  to  quote  a  passage 
from  the  masterly  work*  of  an  English  writer,  Mr. 
Henry  F.  A.  Davis.  He  says:  "This  (act)  has  been 
unfavorably  noticed  by  some  learned  judge  who  has 
had  to  decide  a  question  arising  under  it.  A  piece  of 
legislation  more  resembling  patch-work  it  would  be 
difficult  to  find  anywhere.  Two  acts  of  parliament, 
originally  intended  to  regulate  associations  having 
very  different  objects  in  view  from  those  contemplated 
by  building  societies,  —  and  having,  as  a  writer  in  the 


*  The  Law  of  Building  and  Free  Hold  Land  Societies,  sd  edition, 
H.  Sweet  &  Sons,  London,  England. 


56  MANUAL  FOR 

Jurist  once  observed,  internal  evidence  of  their  having 
been  passed  during  the  chaos  of  a  legislative  convul- 
sion, —  badly  conceived  and  badly  executed,  were  by 
a  third  act,  if  possible,  more  clumsy  than  either, 
incorporated  so  as  to  form  the  code  which  was  to 
govern  building  societies." 

IN  THE  UNITED  STATES. 

The  history  of  associations  in  the  United  States  is 
yet  recent.  The  associations,  which  appeared  slowly 
at  first,  and,  later,  more  rapidly,  were  organized,  partly 
as  unincorporated,  voluntary  associations,  and  partly 
under  charters  obtained  under  the  general  acts  of 
several  of  the  states  authorizing  the  incorporation 
of  beneficial  and  other  such  associations.  The  rapid 
development  of  the  country  led  to  a  like  rapid  develop- 
ment of  building  associations,  so  that  legislation  soon 
became  imperative.  During  the  years  from  1850  to 
1860  most  of  the  older  states  endeavored  by  legislation 
to  regulate  the  formation,  powers,  and  management 
of  building  associations.  Since  1860  the  newer  states 
have  taken  up  the  subject.  At  the  present  time,  in 
nearly  all  the  states  and  territories  there  is  some 
statutory  provision  for  the  government  of  associations. 

Building  associations  are,  as  a  rule,  recognized  by 
the  different  states  as  a  class  of  corporations  distin- 
guished from  every  other,  peculiar  alike  in  their  privi- 
leges and  disabilities.  Some  of  the  early  legislation 
connected  therewith  may  be  classed  as  hasty,  having 
been  adopted  by  legislators  ignorant  and  inexperienced 
in  the  subject,  and  with  no  commensurate  precedents 
for  their  guidance.  But  of  late  years  the  subject  has 
received  more  intelligent  attention,  and  many  legisla- 
tors have  given  much  study  to  the  various  problems 


BUILDING  ASSOCIATIONS.  57 

connected  with  it.  As  a  result  legislation  is  gradually 
assuming  better  form  in  the  different  states.  But  it 
must  be  confessed  that  there  is  still  room  for 
improvement.  It  does  not  seem  likely  that  building 
association  laws  will  ever  reach  that  degree  of  sim- 
plicity, perfection,  and  uniformity,  which  their  great 
importance  demands  for  them  until  some  system  of 
general  co-operation  among  the  many  people  inter- 
ested in  them  in  all  the  states  and  territories  is  estab- 
lished. This  will  hardly  be  brought  about  until  the 
system  of  leagues,  suggested  in  another  place,  is 
accomplished. 

LITIGATION. 

Not  only  has  the  legislation,  under  which  associa- 
tions have  operated,  been  imperfect,  but  the  asso- 
ciations themselves  have,  not  infrequently,  been 
organized  by  persons  both  inexperienced  and  unin- 
formed in  such  matters.  It  has  happened,  therefore, 
that,  through  crude  legislation  on  the  one  hand,  and 
crude  organization  on  the  other,  many  associations 
have  failed  to  a  greater  or  less  extent  in  fulfilling 
their  purpose,  and  that,  in  most  of  the  states,  litiga- 
tion has  arisen  in  consequence. 

It  would  be  foreign  to  the  character  and  purpose 
of  this  work,  to  undertake  to  give  digests  of  the  laws 
of  the  different  states  and  territories  in  reference  to 
associations,  or  to  give  an  account  of  the  cases  arising 
under  these  laws,  and  of  the  decisions  that  have  been 
rendered  in  the  different  courts.  Such  matter  belongs 
in  a  work  of  a  legal  rather  than  of  a  popular  character. 
Members  of  associations  should  look  to  their  regular 
legal  advisers  for  information  and  instruction  upon  all 
mooted  or  doubtful  questions  of  a  legal  character. 


CHAPTER   VI. 


HOW  TO  O 


OW  TO  URGANIZE. 


NECESSARY  CONDITIONS. 

In  seeking  to  establish  a  building  association,  it  is 
necessary  to  bear  in  mind  the  conditions,  which  have 
already  been  stated,  which  are  essential  to  make  such 
a  co-operative  undertaking  successful.  There  must 
be  a  community  of  wage-earners,  or  of  persons  with 
small  incomes,  and  the  element  of  permanency  in  the 
local  enterprises  from  which  the  incomes  of  the  com- 
munity are  derived.  This  element  of  permanency  is 
usually  found  in  the  extensive  manufacture  of  staple 
articles,  in  the  sale  of  the  same  in  populous  districts, 
in  market-gardening  and  other  forms  of  agricultural 
pursuits,  in  mining,  and  in  numerous  other  industrial 
occupations. 

Building  associations  have  so  multiplied  in  some 
communities  that  there  is  already  competition  among 
them.  Where  numerous  associations  already  exist 
of  course  the  question  must  be  carefully  considered 
as  to  whether  there  is  a  real  demand  for  another. 
Associations  are  sometimes  brought  into  existence, 
not  so  much  from  the  actual  wants  of  the  people  who 
are  induced  to -become  members,  as  in  response  to  the 

(58) 


MANUAL  FOR  BUILDING  ASSOCIATIONS.      59 

efforts  of  some  individual  or  individuals  who  have 
their  own  private  ends  in  view.  Some  person  engaged 
in  trade  of  some  character  may  desire  to  organize  an 
association  and  have  it  meet  at  his  place  of  business 
or  in  his  vicinity  so  as  to  draw  in  custom  for  him. 
Some  attorney  may  take  an  active  part  in  the  organi- 
zation of  an  association  in  order  to  increase  his  client- 
age. Some  one  interested  in  a  real  estate  transaction 
may  organize  an  association  in  order  to  find  a  market 
for  his  lands.  These  motives  are  all  well  enough  in 
their  way,  provided  there  is  back  of  them  a  real  need 
for  an  association  on  the  part  of  the  people  them- 
selves who  are  to  compose  it. 

As  matters  now  are  in  some  communities  it  would 
seem  far  more  proper  to  consider  the  question  of  con- 
solidation, and  the  reduction  rather  than  the  increase 
of  the  number  of  associations. 

PRELIMINARY  STEPS. 

Great  importance  attaches  to  the  first  steps  taken 
toward  the  organization  of  an  association.  Unless 
a  good  foundation  is  laid  in  the  beginning  the  enter- 
prise will  most  likely  prove  a  failure.  Great  care 
must  be  taken  to  have  only  trustworthy  men  con- 
nected with  the  initial,  as  well  as  all  subsequent, 
proceedings. 

When  the  proper  persons  have  been  interested  in 
the  movement  it  is  well  for  them  to  attach  their  names 
to  an  agreement  to  share  equally  in  the  liability  for 
the  preliminary  expenses,  such  as  advertising,  rent  of 
place  of  meeting,  blanks,  books,  etc.  A  public  meet- 
ing of  those  interested  should  then  be  called  in  some 
convenient  and  respectable  place.  At  this  meeting 


60  MANUAL  FOR 

temporary  officers  should  be  chosen.  These  consist 
usually  of  a  chairman,  a  secretary,  a  treasurer,  and 
an  attorney.  These  should  be  persons  of  some  influ- 
ence in  the  community,  and  should  have  had  some 
experience  in  conducting  public  meetings.  Some  one 
should  be  present  at  such  meeting  who  is  prepared  to 
make  a  clear  explanation  of  the  purposes  and  work- 
ings of  a  building  association.  After  this  explanation 
is  made  the  subject  should  be  thrown  open  for  general 
discussion  under  the  usual  parliamentary  rules. 

It  may  not  be  possible  at  the  first  meeting  to 
determine  finally  in  reference  to  the  advisability  of 
attempting  to  organize  an  association.  The  meeting 
may  decide  to  appoint  solicitors  to  make  a  preliminary 
canvass,  so  as  to  discover  the  probability  of  securing 
a  sufficient  number  of  subscribers  to  justify  the 
attempt.  For  this  or  other  satisfactory  reasons  it  may 
be  necessary  to  hold  a  number  of  preliminary  meet- 
ings before  attempting  a  permanent  organization. 

It  will  not  be  out  of  place  to  drop  the  caution 
that  much  care  should  be  exercised  to  keep  the  prelim- 
inary expenses  as  low  as  possible.  Services  rendered 
by  individuals  should  generally  be  gratuitous,  and 
the  expenses  for  necessary  supplies  may  be  made 
merely  nominal. 

CHOICE  OF  NAME. 

When  it  shall  have  been  decided  finally  to  proceed 
with  the  organization,  the  first  thing  to  be  done  is  to 
choose  a  name.  In  making  this  choice  the  following 
matters  must  be  borne  in  mind :  (i)  That  the  name 
must,  in  its  form,  correspond  to  the  requirements 
of  the  statute  under  which  the  association  is  to  organ- 


BUILDING  ASSOCIATIONS.  61 

ize ;  (2)  It  must  not  be  identical  with,  or  bear  a  close 
and  misleading  resemblance  to,  the  name  of  some 
other  similar  organization  in  the  place  where  organ- 
ized; (3)  It  must  not  be  of  such  general  descriptive 
character  that  the  association  can  not  by  using  it 
acquire  exclusive  rights  in  it ;  (4)  The  name  must  not 
be  improperly  or  prejudicially  assumed,  and  must  not 
be  misleading  in  its  form  or  character. 

CAPITAL  STOCK. 

It  will  be  necessary  also  at  an  early  stage  in  the 
proceedings  to  determine  upon  the  amount  of  capital 
stock  of  the  proposed  association  and  the  number  and 
value  of  shares.  This  is  necessary  in  order  that  the 
subject  may  be  canvassed  intelligently  in  the  commu- 
nity. The  number  and  amount  of  shares  should  be 
determined  by  the  local  circumstances.  In  larger 
cities  the  capital  stock  of  associations  varies  from 
$200,000  to  $5,000,000.  Shares  range  from  $100  to 
$500  each.  The  regular  dues  or  stock  payments  are 
generally  25  cents,  50  cents,  or  $1.00.  In  the  smaller 
towns  the  capital  stock  of  associations  varies  from 
$50,000  to  $1,000,000,  shares  being  from  $100  to 
$500  each,  payable  in  weekly  or  monthly  installments. 
The  number  of  shares  which  one  member  may  hold 
should  be  restricted  within  reasonable  limits  so  that 
the  association  can  not  be  controlled  by  a  few  large 
shareholders.  This  is  especially  necessary  when  stock- 
holders are  allowed  as  many  votes  as  they  have  shares 
of  stock.  In  some  states  the  laws  provide  that  no 
stockholder  may  vote  more  than  a  certain  number  of 
shares,  —  twenty  for  instance,  —  though  he  may  own 
as  many  as  he  desires. 


62  MANUAL  FOR 

The  name  of  an  association  and  the  amount  and 
value  of  stock  are  of  course  finally  recorded  in  the 
constitution  and  articles  of  incorporation.  The  whole 
subject  of  Capital  Stock,  which  is  of  great  importance, 
is  fully  discussed  in  its  appropriate  place  in  another 
part  of  this  work.* 

THE  CONSTITUTION. 

The  most  important  matter  connected  with  the 
organization  of  an  association  is  the  framing  of  the 
rules  or  articles  under  which  it  is  to  operate.  This 
task  should  be  placed  in  the  most  competent  and 
experienced  hands,  and  their  work  should  be  carefully 
scrutinized  before  adoption.  That  part  of  the  rules, 
which  is  to  become  the  organic  law  of  the  association, 
the  constitution,  in  its  essential  features  at  least,  in 
some  states  must  pass  under  the  inspection  and 
approval  of  the  incorporating  authorities,  and  in  fact 
form  part  of  the  articles  of  incorporation.  .As  the 
constitution  becomes  the  fundamental  law,  it  should 
be  framed  with  a  view  to  permanency,  allowing  only 
the  most  imperative  necessity,  and,  as  nearly  as  possi- 
ble unanimity,  to  change  it.  For  this  reason  its  provi- 
sions should  be  well  understood  and  be  clad  in  plain 
language,  devoid  of  clouded  and  doubtful  phrasing. 
All  minor  regulations  should  be  omitted  therefrom 
and  be  reserved  for  the  by-laws  and  rules  of  business. 

Not  only  should  the  constitution  have  the  utmost 
care  and  forethought  on  the  part  of  those  drafting 
and  adopting  it,  but  it  should,  if  possible,  be  based 
upon  some  model  which  has  stood  the  test  of  experi- 

*)  See  Chapter  VII. 


BUILDING  ASSOCIATIONS.  63 

ence.  It  is  found  that  much  the  larger  part  of  the 
litigation  that  has  arisen  in  the  different  states  in 
connection  with  building  association  affairs,  is  owing 
to  the  careless  and  crude  manner  in  which  constitu- 
tions and  rules  are  framed.  Courts  have  complained 
much  about  the  negligence  displayed  in  the  wording 
of  these  important  documents.  It  is  not  uncommon 
indeed  to  find  contradictory  provisions  in  the  same 
constitution  relating  to  important  matters. 

BY-LAWS. 

After  the  constitution  has  been  adopted,  a  set  of 
by-laws  should  be  prepared  for  the  internal  govern- 
ment of  the  association  in  accordance  with  the  consti- 
tution and  with  generally  accepted  parliamentary 
usage.  Many  associations  make  the  mistake  of  in- 
cluding all  their  rules  in  the  constitution.  The  by- 
laws are  not  of  an  organic  character  but  simply 
express  an  agreement  among  the  members  as  to  how 
the  different  parts  of  the  work  of  the  association 
should  be  carried  on.  They  should  therefore  be  kept 
separate  from  the  constitution  so  that  they  may  be 
changed  and  modified  from  time  to  time  as  may  suit 
the  convenience  or  necessities  of  the  association  and 
its  officers  and  members. 

The  by-laws  must  conform  to  the  constitution 
of  the  association  and  to  the  general  principles  of 
common  justice  and  equity  and  must  be  reasonable 
in  their  requirements.  A  by-law  is  presumed  to  be 
enacted  by  the  common  consent  of  all  the  members 
of  the  association.  If  therefore  a  by-law  shall  be 
enacted  that  infringes  upon  the  common  rights,  or 
the  rights  established  by  contract,  of  any  member  it 
is  void.  In  like  manner,  if  a  by-law  is  repealed  and 


64  MANUAL  FOR 

thus  injustice  is  done  to  any  member  whose  rights 
were  before  protected  by  the  by-law,  such  action  is 
void.  The  enactment  of  new  by-laws  can  not  add 
additional  requirements  to  contracts  in  existence 
before  their  enactment.  By-laws  must  not  be  enacted 
which,  from  their  nature,  can  not  be  enforced,  or 
which  are  evidently  of  a  "vexatious,  nugatory,  and 
oppressive"  character.  Nor  can  a  by-law  be  enacted 
which  has  the  effect  of  restricting  any  member  from 
legal  rights  and  remedies.* 

INCORPORATION. 

The  different  states  have  different  methods  of  pro- 
viding for  the  incorporation  of  stock  companies  for 
business  and  beneficial  purposes.  A  number  of  the 
states  have,  in  addition  to  this,  made  special  provision 
for  the  incorporation  of  building  associations,  treating 
them  as  a  special  class  of  corporations  with  special 
powers  and  disabilities.  After  the  constitution  has 
been  adopted  or,  sometimes  even  before  this  has  been 
done,  articles  of  incorporation  should  be  prepared  and 
forwarded  to  the  proper  authorities  for  acceptance  and 
record.  Much  care  should  be  taken  to  secure,  as 
incorporators,  the  best  and  most  influential  persons 
available.  A  certain  amount  of  stock  must  be  sub- 
scribed, usually  ten  per  cent.,  before  the  association 
can  be  incorporated. 

There  are  different  methods  of  incorporation  in 
the  different  states.  They  are  known  as  incorpora- 
tion by  voluntary  association,  by  special  act  of  the 
legislature,  by  decree  of  court,  and  by  letters  patent 
from  the  executive.  The  drafting  and  securing  of 


*)  In  the  Appendix  will  be  found  form  for  Constitution  and  By-I,aws. 


BUILDING  ASSOCIATIONS.  65 

articles  of  incorporation  should  be  placed  in  the 
hands  of  competent  attorneys.  Forms  of  incorpora- 
tion papers  in  common  use  in  Ohio,  are  given  in 
another  place.* 

OFFICERS. 

The  constitution  generally  names  the  officers  of  the 
association  and  the  time  and  method  of  their  election. 
As  soon  as  the  constitution  and  by-laws  have  been 
adopted  it  will  be  necessary  to  complete  the  perma- 
nent organization  of  the  association  by  the  election 
of  the  prescribed  officers  according  to  the  method  laid 
down  in  the  constitution.  The  same  care  must  be 
exercised  here  as  in  all  other  steps  incident  to  the 
formation  of  an  association.  The  officers  are  to 
occupy  very  responsible  positions  and  should  be  men 
possessing  ability,  integrity,  and  popularity.  Practi- 
cally they  will  have  full  control  of  the  affairs  of  the 
association.  Its  success  will  depend  very  largely 
upon  the  attention  they  give  to  its  business.  The 
interests  of  shareholders  will  be  promoted  or  injured 
according  to  the  degree  of  faithfulness  and  ability 
with  which  they  discharge  their  duties. 

HEADQUARTERS. 

Before  an  association  can  go  into  regular  opera- 
tion, it  will  have  to  establish  permanent  headquarters. 
These  should  be  inexpensive,  centrally  located,  con- 
venient, clean,  and  respectable.  Many  an  association 
has  failed  to  reach  its  greatest  degree  of  usefulness 
simply  because  it  has  made  a  mistake  in  locating  its 
headquarters. 

*)  See  Chapter  on  Forms. 


66  MANUAL  FOR 

The  headquarters  should  be  fitted  up  inexpen- 
sively but  conveniently.  There  should  be  desks, 
tables,  and  seats  sufficient  for  the  transaction  of  the 
business  of  the  association.  Bach  association  should 
have  a  safe  for  the  proper  protection  of  its  books, 
papers,  and  such  sums  of  money  as  may  be  tempor- 
arily in  the  hands  of  its  officers.  The  officers  are 
made  responsible  for  the  custody  of  the  property  of 
the  association,  and  are  compelled  to  give  bonds  for 
its  security.  They  should  be  provided  with  a  safe 
place  of  deposit  for  everything  for  which  they  are 
made  responsible. 

After  the  headquarters  have  once  been  established 
it  should  be  understood  that  they  constitute  the 
regular  business  office  of  the  association,  and  that  all 
communications,  notices,  etc.,  intended  for  the  asso- 
ciation should  be  addressed  to  these  headquarters,  and 
that  they  will,  if  so  addressed,  receive  prompt  atten- 
tion. This  implies,  of  course,  that  there  shall  always 
be  some  one  in,  or  adjacent  to,  the  headquarters  to 
receive  such  communications,  and  that  the  officers,  — 
the  secretary  particularly,  —  will  visit  or  communicate 
with  the  one  in  charge  of  the  meeting- place,  to  give 
personal  attention  to  any  business  that  may  require  it. 

All  members  must  be  notified  promptly  of  any 
change  in  the  place  of  meeting. 

An  attractive  sign  should  be  conspicuously  dis- 
played at  the  headquarters,  advertising  the  association. 
This  sign  should  give  the  name  of  the  association,  the 
number  and  the  value  of  shares,  the  rate  of  payments 
required,  and  the  dates  and  the  hours  of  the  meetings. 
Many  an  association  has  received  new  members 
through  the  display  of  an  appropriate  sign.  Directors 


BUILDING  ASSOCIATIONS.  67 

should  not  be  over-economical  in  this  connection. 
Money  judiciously  expended  in  advertising  an  asso- 
ciation will  bring  desirable  returns. 

In  England  the  statutes  require  building  societies 
to  display  signs  in  some  such  form  as  described  above. 
On  these  signs,  and  on  all  the  printed  matter,  the  word 
"Limited"  must  always  follow  the  title  of  the  society. 
This  is  intended  to  show  that  the  liability  of  share- 
holders is  limited  to  their  actual  shares  in  the  society. 

MEETINGS. 

Meetings  should  be  held  generally  in  the  evening, 
that  evening  being  selected  which  is  most  convenient 
to  members  and  officers.  It  is  well,  if  possible,  to 
select  an  evening  on  which  no  other  association  meets 
in  the  vicinity.  Monday  or  Saturday  evening  is  usu- 
ally the  best  for  meeting,  for  workingmen  are  gen- 
erally paid  on  those  days  and  like  to  make  their 
weekly  deposits  at  once.  From  October  to  April  the 
hour  for  receiving  dues,  etc.,  may  be  from  7:30  to  8:30 
P.  M.,  and  from  April  to  October  from  8  to  9  P.  M. 
After  this  time  the  directors  hold  their  regular  meet- 
ings. But  this  question  should  be  governed  entirely 
by  local  circumstances  and  the  convenience  and  wishes 
of  shareholders. 

NEW  LEGISLATION. 

The  suggestions  of  this  chapter  are  necessarily  of  a 
general  character.  In  each  state  they  must  be  carried 
out  according  to  the  conditions  established  by  the 
existing  statutes.  So  many  new  laws  are  being 
enacted  that  changes  are  necessary  in  the  details 
of  the  organization  and  work  of  associations  from 
time  to  time. 


CHAPTER  VII. 


STOCK  AND  STOCKHOLDERS. 


STOCK  AND  SHARES. 

The  stock  of  a  corporation  is  defined  to  be  "that 
money  or  property  which  is  put  into  a  single  corporate 
fund  by  those  who,  by  subscription  therefor,  become 
members  of  the  corporate  body."  This  common  fund 
or  stock  is  divided  into  equal  parts  called  shares. 
The  number  and  value  of  shares  into  which  stock  is 
divided  is  fixed  by  the  general  statutes  and  by  the 
rules  of  the  association.  A  person  becoming  a  mem- 
ber of  a  corporation  subscribes  for  a  certain  number 
of  these  shares  and  is  known  as  a  shareholder  or 
stockholder.  This  subscription  binds  him  to  pay  into 
the  common  fund  in  regular  installments,  the  sum 
represented  by  all  of  the  shares  for  which  he  has 
subscribed.  The  number  of  shares  one  member  may 
hold  is  usually  fixed  by  the  constitution  or  by-laws. 
In  some  states  the  statutes  fix  the  number  of  shares 
that  may  be  held  by  any  one  person  or  corporation. 
In  some  instances  no  limit  is  fixed  to  the  number  of 
shares  that  may  be  held,  but  only  a  specified  number 
may  be  voted.  The  minimum  amount  of  stock  to  be 
taken  —  that  is  to  say,  the  number  of  shares  for  which 

(68) 


MANUAL  FOR  BUILDING  ASSOCIATIONS.      69 

subscriptions  must  be  made  before  an  association  can 
begin  operation  —  is  generally  determined  by  the  state 
laws  and  the  rules  of  the  association. 

INCREASE  OF  STOCK. 

The  maximum  capital  stock  of  an  association  is 
fixed  originally  in  the  articles  of  incorporation  and  by 
the  constitution.  But  in  most  states  it  is  competent 
for  the  association,  by  virtue  of  authority  given  it  for 
that  purpose  in  the  charter,  to  increase  the  stock 
within  the  limits  established  by  the  statute,  and  in  the 
manner  required  to  legalize  such  change.  This 
increase  of  stock  should  be  made  only  when  all  other 
stock  is  taken  by  bonafide  subscription,  since  its  issue 
involves  additional  expenses.  An  increase  of  stock 
must  always  be  made  in  strict  accordance  with  the 
legal  provisions,  and  should  therefore  be  undertaken 
only  under  competent  legal  advice.  There  can  be  no 
uniform  rule  laid  down  concerning  increase  of  stock. 
All  depends  upon  the  nature  of  the  association,  the 
rules  it  has  adopted,  and  the  provisions  of  the  statutes 
under  which  it  operates.  In  terminating  associations, 
for  instance,  there  can  be  no  arrangement  for  increase 
of  stock  as  the  term  is  generally  understood. 

STOCK  AS  PROPERTY. 

The  ownership  of  a  share  or  shares  of  stock  in  a 
building  association  does  not  give  the  holder  a  pro- 
prietary right  in  the  property  of  the  association.  It 
simply  gives  him  the  right  to  share  in  the  surplus 
profits  obtained  from  the  use  and  investment  of  the 
revenues  of  the  association.  The  funds  of  the  asso- 
ciation may,  for  instance,  be  invested  exclusively  in 


70  MANUAL  FOR 

real  estate.  The  shares  are  nevertheless  merely  per- 
sonal property  and  do  not  entitle  the  holder  to  any 
individual  proprietorship  in  the  real  estate  belonging 
to  the  association. 

SHARES  TRANSFERABLE. 

Shares  of  stock  in  a  building  association  may,  like 
other  personal  property,  be  transferred  from  one 
owner  to  another.  The  transfer  is  made  "  by  assign- 
ment and  delivery."  The  method  of  transfer  should 
always  be  specified  in  the  constitution  or  by-laws  of  an 
association.  Of  course  no  transfer  of  stock  can  be 
made  when  such  transfer  trespasses  in  any  way  upon 
the  corporate  rights  of  the  association.  A  member 
who  is  in  arrears  can  not  transfer  his  stock  until  he 
makes  settlement  to  date.  On  the  other  hand  the 
association  can  not  resist  such  transfer  where  the 
holder  of  the  stock  has  complied  with  all  the  necessary 
conditions.  Usually  a  fee,  called  the  transfer  fee,  is 
charged  to  the  person  to  whom  a  transfer  is  made. 
This  is  an  equivalent  to  the  admission  fee  charged 
to  new  members. 

STOCK  PAYMENTS  OR  DUES. 

A  member  of  an  association  is  the  holder  of  one  or 
more  of  its  shares  of  stock.  The  par  or  paid-up  value 
of  a  share  is  fixed  in  the  constitution  at  such  amount 
as  may  be  decided  upon,  generally  from  $200  to  $500, 
This  par  value  of  a  share  in  its  expected  value.  Its 
actual  value  is  a  very  different  thing,  especially  during 
the  first  years  of  a  shareholder's  membership.  A 
subscriber  for  a  share  of  stock  of  the  par  value  of  $500 
has  simply  made  an  agreement  to  pay  into  the  asso- 


BUILDING  ASSOCIATIONS.  71 

ciation  a  regular  weekly  or  monthly  installment  of  a 
certain  amount,  which  periodical  payments  are  to  be 
continued  until  the  accumulated  payments,  together 
with  the  accrued  dividends  thereon,  shall  amount  to 
the  sum  stipulated  as  the  full  value  of  the  share. 
These  periodical  installments  are  called  stock- pay- 
ments, or  dues.  It  is  seen,  therefore,  that  the  actual 
value  of  a  share  at  any  time  is  determined  solely  by 
the  amount  paid  in  and  accumulated  up  to  that  date 
and  not  at  all  by  its  face  value.  The  regular  payment 
of  these  periodical  contributions  by  members  is  the 
prime  dependence  of  the  association  for  its  success  as 
an  enterprise.  The  constitution  and  by-laws  of  every 
association,  therefore,  must  prescribe  carefully,  the 
time  and  manner  of  making  these  payments,  and  fix 
penalties  for  default  of  payment.  This  subject  is 
discussed  further  in  its  appropriate  place  in  another 
chapter.* 

PAID-UP  STOCK. 

A  share  of  stock  is  paid-up  when  it  has  reached  its 
full  value. 

Generally  shares  are  paid  for  in  regular  periodical 
installments,  as  explained  in  the  preceding  section. 
Since  each  stockholder  shares  equitably  in  the  profits 
of  the  business  of  the  association,  from  time  to  time 
dividends  are  declared  and  placed  to  the  credit  of  the 
different  stockholders.  These  dividends  may  be 
drawn  out,  but  are  usually  left  to  stand  to  the  credit 
of  the  shareholder.  When  the  total  amount  of  dues 
and  dividends  to  the  credit  of  any  stockholder  equals 

*)  See  Chapter  VIII. 


72  MANUAL  FOR 

the  full  amount  of  his  shares,  the  shares  are  paid-up 
or  have  matured. 

A  subscriber  to  the  stock  of  an  association  who 
simply  is  seeking  a  safe  and  profitable  investment  for 
his  money  may  prefer  to  pay  in  the  full  value  of  his 
share  or  shares  in  one  payment  at  the  beginning, 
instead  of  in  numerous  small  periodical  payments. 
In  this  case  the  stock  is  paid-up,  or  matures,  at  the 
very  beginning. 

If  the  owner  of  paid-up  stock  does  not  desire  to 
draw  out  his  money  the  directors  may,  at  their  dis- 
cretion, issue  a  "certificate  of  paid-up  stock"  to  him. 
Paid-up  stock  is  entitled  to  share  in  the  earnings  of 
the  association  like  running  stock,  unless  restrictions 
are  made  in  the  constitution  or  by-laws.  Holders  of 
paid-up  stock  may  withdraw  it,  the  same  as  running 
stock,  upon  proper  notice.  Paid-up  stock  certificates 
are  negotiable  and  may  be  sold  or  transferred,  like  the 
stock  of  a  bank  or  other  corporation. 

It  was  formerly  the  custom,  which  is  still  followed 
to  a  great  extent,  to  pay  off  shares  as  they  matured  in 
the  regular  course  of  the  association.  In  a  terminat- 
ing association  this  of  course  must  be  done.  In  the 
serial  associations,  where  all  the  stock  of  each  series 
matures  at  one  time,  it  is  necessary  that  there  must  be 
a  large  accumulation  of  funds  toward  the  end  of  the 
series  to  meet  the  stock  payments  which  will  then 
become  due.  The  disadvantages  arising  from  such  a 
necessity  are  readily  understood.  In  the  permanent 
or  perpetual  associations,  where  shares  are  maturing 
in  small  numbers  from  time  to  time,  this  large  accu- 
mulation of  funds  to  pay  them  off  is  not  a  matter  of  so 
much  consequence.  The  constant  addition  of  new 


BUILDING  ASSOCIATIONS.  73. 

members  supplies  the  necessary  funds  to  meet  the 
withdrawal  of  the  maturing  shares. 

It  is  always  a  question  worth  considering  as  to 
whether  the  funds  should  be  withdrawn  from  the 
association  when  shares  mature.  On  the  one  hand, 
the  association  may  be  able  to  use  the  money  to  good 
advantage  and  may  be  crippled  in  its  operations  by  its 
withdrawal.  This  is  especially  true  in  the  case  of  a 
serial  association,  for  it  is  necessary  for  the  association 
to  hoard  its  money  for  quite  a  while  in  advance  and 
then  to  part  with  the  large  amount  thus  saved  up. 
Of  course  this  must  limit  its  operations.  On  the  other 
hand,  unless  the  owner  of  the  stock  has  some  specific 
use  for  it,  as  in  the  purchase  of  property  or  the  paying 
off  of  a  mortgage,  or  something  of  that  kind,  it  may 
be  better  for  him  to  leave  it  invested  in  the  association 
than  to  draw  it  out.  The  possession  of  so  much 
money  immediately  in  hand  brings  with  it  the  tempta- 
tion to  spend  it  needlessly,  or  to  risk  it  in  some  specula- 
tive enterprise.  In  the  case  of  a  serial  association 
the  placing  of  so  much  ready  capital  in  the  hands 
of  so  many  persons  whose  stock  has  matured  may 
result  in  the  expenditure  of  a  large  part  of  the  money 
which  might  have  been  reserved  for  better  uses. 

Some  new  features  have  been  introduced  in  some 
associations  recently  in  connection  with  the  issuance 
of  paid-up  stock  certificates.  Under  the  old  rule  the 
certificates  are  redeemable  only  by  special  action  of 
the  board  of  directors.  The  change  consists  in  the 
attachment  of  a  series  of  coupons  to  the  certificates* 
This  plan  is  possible  in  associations  which  have  an 
assured  prospect  of  having  money  to  sell  or  loan  for 
some  time  ahead.  The  coupons  specify  the  rate  of 


74  MANUAL  FOR 

interest.  A  copy  of  these  coupons  will  be  found  in 
the  chapter  on  Forms.  The  use  of  the  coupons  saves 
the  secretary  the  trouble  of  issuing  special  vouchers 
for  dividends  on  paid-up  stock.  In  some  cases  these 
coupons  are  accepted  as  cash  for  the  amount  of  divi- 
dend. It  is  evident  that  it  is  only  under  certain  cir- 
cumstances that  these  features  can  be  adopted  and 
followed.  The  rate  of  guaranteed  dividend  must  be 
so  low  as  to  justify  the  directors  in  adopting  the  plan, 
and  there  must  be  some  positive  assurance  that  it  can 
be  continued. 

The  rules  of  an  association  in  reference  to  paid-up 
stock  should  be  most  carefully  drawn  so  as  to  cover 
all  contingencies  or  emergencies. 

Any  member  whose  stock  has  matured  should  con- 
sider very  carefully  as  to  whether  or  not  it  will  be  best 
for  him  to  draw  out  his  money  or  to  take  a  paid-up 
stock  certificate  and  leave  the  money  in  the  association 
as  an  investment. 

OTHER  FACTS  CONCERNING  STOCK. 

Various  other  questions  relating  to  stock  have  been 
determined  by  general  usage  or  passed  upon  by  the 
courts.  Associations  have  the  right  of  lien  upon 
shares,  which  extends  to  all  liabilities  of  shareholders 
for  dues,  fines,  and  other  lawful  charges.  An  associa- 
tion, in  extreme  cases,  may  collect  by  suit  the  dues 
of  delinquent  members  who  are  endeavoring  to  work 
injury  to  the  association.  In  cases  where  the  share- 
holder has  borrowed  money  from  the  association  his 
regular  dues  are  not  to  be  credited  upon  his  loan  but 
are  to  be  applied  upon  his  stock  account  just  as  the 
dues  of  any  other  member.  He  may,  however,  at  any 


BUILDING  ASSOCIATIONS.  75 

time  have  his  accumulated  stock-payments  applied 
upon  his  debt ;  or,  if  the  association  holds  a  lien  upon 
his  shares  for  security  of  his  indebtedness,  the  associa- 
tion may,  in  case  of  his  default  of  obligations,  apply 
his  accumulated  stock-payments  to  cancel  his  indebted- 
ness as  far  as  they  will  reach.  In  such  cases  default- 
ing members  have  the  benefit  only  of  the  aggregate 
of  their  paid-up  subscriptions.  But  if  a  member  vol- 
untarily repays  the  money  thus  applied,  there  is  added 
the  declared  portion  of  the  profits  of  the  association 
up  to  the  time  of  the  repayment,  provided  he  has  not 
assigned  his  shares  to  a  third  party.  An  assignee  or 
executor  of  a  member  may  exercise  the  same  rights  in 
the  control  of  stock  as  the  shareholder  himself.  Stock 
may  be  assigned  to  an  association  by  a  borrowing 
member  as  collateral  security  for  his  loan,  and  it  is 
the  usual  practice  of  associations  to  require  this  assign- 
ment. Where  the  stock  of  a  borrowing  member  is 
assigned  to  an  association  as  collateral  security  and 
real  estate  is  at  the  same  time  mortgaged,  the  liability 
falls  first  upon  the  stock.  If  this  fails  to  extinguish 
the  indebtedness  then  the  real  estate  or  other  collateral 
security  becomes  liable. 

In  order  that  no  question  may  arise  in  reference 
to  any  of  these  miscellaneous  matters  they  should 
all  be  covered  as  nearly  as  possible  by  explicit  rules 
in  the  constitution  and  by-laws  of  an  association. 
The  practice  in  connection  with  many  features  of 
their  work  is  not  at  all  uniform  in  associations. 
Hence  the  necessity  that  each  association  carefully 
define  in  its  rules  the  course  which  it  will  adopt  in 
connection  with  all  matters  concerning  which  differ- 
ences of  opinion  might  arise  in  the  absence  of  rules 
specially  governing  them. 


CHAPTER   VIII. 


DUTIES  AND  RIGHTS  OF  MEMBERS. 


MEMBERSHIP. 

Membership  in  a  building  association  is  acquired 
by  becoming  a  holder  of  its  stock.  All  persons  or 
corporations  legally  capable  of  making  contracts  may 
become  members  of  an  association.  In  some  states, 
by  special  legislation,  membership  is  permitted  to 
minors  and  married  women,  who  under  the  general 
law  in  those  states  would  be  debarred.  As  a  rule  one 
association,  however,  may  not  become  a  member  in 
another. 

There  are  two  classes  of  members — depositors  and 
borrowers.  Generally  the  membership  is  sought  for 
the  purpose  of  making  a  safe  deposit  of  the  small  sur- 
plus earnings  of  persons,  who  otherwise  would  have 
to  keep  this  surplus  at  home  where  it  is  unsafe  and 
liable  to  be  expended.  These  are  called  depositing 
members.  A  person  may  likewise  become  a  member 
for  the  purpose  of  obtaining  a  loan,  who  is  called  a 
borrowing  member. 

Every  subscriber  for  stock  should  pay  a  specified 
admission  fee  and  also  purchase  a  pass  book.  Dues  on 
stock  begin  from  the  time  of  subscription.  In  asso- 


MANUAL  FOR  BUILDING  ASSOCIATIONS.      77 

ciations  as  now  conducted,  payment  of  back  dues  is 
not  required,  all  stock  dating  from  day  of  actual  issue. 
But  dues  may  be  paid  in  advance,  in  part  or  in  full. 
When  paid  in  advance  in  part,  in  some  associations, 
they  draw  dividends.  When  paid  in  advance  in  full, 
certificates  of  paid-up  stock  should  be  issued. 

A  pass  book  is  prima  facie,  and  generally,  suffi- 
cient, evidence  of  membership.  An  association  can 
not  deny  membership  to  any  person  from  whom  it 
continues  to  accept  dues.  A  person  who,  as  a  mem- 
ber, receives  the  benefits  arising  from  membership,  is 
estopped  from  denying  his  membership.  Member- 
ship is  terminated  by  the  death  of  a  member,  by  a 
transfer  of  shares,  by  forfeiture,  by  voluntary  with- 
drawal, by  the  dissolution  of  the  association,  or  by  the 
expiration  of  the  series  in  which  the  member's  stock 
stands.  Where  a  member  becomes  a  borrower,  his 
membership  may  cease  by  special  contract  with  the 
association. 

DUTIES  OF  MEMBERS. 

A  person  who  becomes  a  subscriber  for  the  stock 
of  a  building  association,  thereby  enters  into  a  con- 
tract with  the  association,  all  the  terms  of  which  he  is 
legally  bound  to  fulfill.  Moreover,  by  subscribing  to 
the  constitution  and  by-laws,  or,  indeed,  even  if  this 
formality  be  omitted,  he,  as  a  shareholder,  must  give 
his  obedience  to  the  rules  of  the  association.  A  mem- 
ber must  pay  his  dues,  unless  he  becomes  unable  to 
do  so,  when  he  should  give  proper  notice  of  with- 
drawal. A  member  should  give  the  association  his 
personal  services  to  a  reasonable  extent  by  attend- 
ance upon  the  meetings  and  by  the  faithful  discharge 


78  MANUAL  FOR 

of  the  functions  of  such  offices  as  he  may  be  elected 
or  appointed  to  fill.  Each  member  of  an  association 
must  bear  his  proportionate  share  of  its  expenses. 
In  case  of  loss  he  must  also  share  in  this.  A  member 
of  an  association  can  not  withdraw  in  order  to  evade 
'his  liability  for  expenses  and  losses.  His  liability  to 
contribute  to  the  expenses  ceases  only  with  his  mem- 
bership. 

FINES  AND  FORFEITURES. 

The  success  of  an  association  is  chiefly  dependent 
upon  the  steady  and  certain  payment  of  the  dues  of 
the  members.  Whenever  a  member  fails  to  pay  up 
his  dues,  to  that  extent  he  inflicts  an  injury  upon 
every  other  stockholder.  The  statutes  generally  pro- 
vide that  associations  may  lay  a  tax  upon  stockholders 
who  willfully  or  otherwise  become  delinquent,  which 
tax  shall  be  sufficient  to  reimburse  the  other  members 
for  their  loss  caused  through  such  negligence.  This 
is  accomplished  by  a  system  of  fines.  Such  fines 
must  be  assessed  in  strict  accordance  with  the  statutes, 
and  also  with  the  rules  of  the  association.  The 
statutes  usually  give  the  association  a  lien  upon  a 
member's  stock  for  arrears  of  dues,  fines,  and  other 
lawful  charges.  Under  the  general  laws  of  equity, 
fines,  in  order  to  be  legal,  must  be  reasonable  and  can 
be  imposed  only  by  way  of  punishment  for  delin- 
quency on  the  part  of  a  member  in  the  discharge  of 
his  duties  as  a  member.  Not  more  than  one  fine  can 
be  imposed  for  the  same  delinquency.  Cumulative 
fines,  that  is  fines  levied  for  the  non-payment  of  fines, 
have  been  overruled  by  the  courts,  and  are  in  some 
states  prohibited  by  law.  The  amount  of  fines  should 


BUILDING  ASSOCIATIONS.  79 

be  measured  by  the  actual  damage  which  the  delin- 
quency of  a  member  has  wrought  upon  his  fellow- 
members.  Directors  of  an  association  generally 
possess  discretionary  powers  in  regard  to  the  re- 
mission of  fines.  The  continued  neglect  of  stock- 
holders to  pay  their  dues  will  prevent  an  association 
from  accomplishing  its  purpose.  If  fines  are  not 
found  sufficient  to  compel  a  member  to  keep  up  his 
payments,  the  association,  in  order  to  relieve  itself 
from  embarrassment  on  his  account,  has  the  right  to 
declare  his  stock  forfeited  and  to  take  possession  of  it, 
subject  to  the  constitutional  provisions.  A  forfeiture 
of  stock  relieves  a  stockholder  of  his  membership  in 
the  association  and  consequently  of  all  further  obliga- 
tions in  the  way  of  dues.  It  is  very  important  that 
the  constitution  and  by-laws  shall  define  carefully  the 
causes  for  which  stock  may  be  declared  forfeited  and 
the  method  by  which  the  forfeiture  shall  take  place. 
The  power  to  declare  stock  forfeited  usually  is  vested 
in  the  directors  or  other  competent  officers,  who  are 
generally  given  some  option  and  discretion  in  the 
matter  so  that  under  certain  circumstances  forfeitures 
may  be  waived  or  postponed. 

It  may  be  of  value  to  present  a  few  practical  and 
specific  suggestions  concerning  fines.  The  plan 
which  seems  to  have  proved  most  generally  accept- 
able is  the  imposing  upon  delinquents  of  a  regular 
fine,  not  exceeding  10  per  cent,  of  the  delinquent 
dues.  If  at  the  end  of  a  period  of  three  months  the 
delinquent  member  is  still  unable  to  make  his  pay- 
ments, if  he  is  a  borrowing  member,  it  will  be  well 
to  ascertain  the  balance  of  his  debt,  his  total  delin- 
quent payments,  and  total  past  fines,  and  to  consoli- 


So  MANUAL  FOR 

date  these  into  one  charge,  and  then  not  add  any 
additional  fines,  but  charge  interest  on  this  gross 
amount  at  some  specified  rate  until  the  matter  is 
closed. 

To  the  fair-minded  director  a  fine  often  suggests 
something  of  injustice  or  inequity.  While  it  repre- 
sents a  source  of  profit  to  the  association  it  may  add 
to  the  burden  of  an  already  over-burdened  member. 
The  delinquency  may  arise,  indeed  often  does  arise, 
through  some  misfortune  which  appeals  strongly  to 
the  sympathies  of  the  officers  and  other  members. 
At  such  a  time  of  adversity  the  addition  of  these  fines 
serves  to  build  up  a  barrier  between  the  member  and 
the  association,  and  to  defeat  the  struggling  delin- 
quent's only  hope  of  escape. 

On  this  account  some  have  even  advocated  the  dis- 
carding of  the  whole  system  of  fines.  All  will  agree 
that  the  imposing  of  extortionate  fines  is  an  evil. 
Directors  should  be  given  discretion  in  regard  to  the 
remission  of  fines  and  should  inquire  carefully  into 
the  circumstances  of  delinquents,  and  always  remit 
a  fine  when  it  seems  to  them  just  and  right  so  to 
do.  If  the  member  is  a  borrower  and  has  become  a 
delinquent  through  misfortunes  or  causes  for  which 
he  is  notblameable/his  case  should  be  inquired  into 
carefully  and  he  should  be  aided  in  any  way  possible 
by  the  association.  This  is  only  a  part  of  the  spirit 
of  co-operation  and  mutual  interest  upon  which  such 
a  society  is  founded.  Such  care  and  leniency  on  the 
part  of  directors  may  go  far  toward  popularizing  an 
association,  and  thus  add  to  its  prosperity  and  use- 
fulness. 

Of  course  what  is  said  above  does  not  apply  to 


BUILDING  ASSOCIATIONS.  81 

cases  of  mere  negligence  or  carelessness.  Such  a 
shareholder  should  be  stirred  up  to  a  sense  of  his 
duty  by  a  prompt  fine.  But  delinquencies  on  account 
of  carelessness  are  not  likely  to  be  continued  for  any 
great  period  of  time,  as  a  month  or  three  months. 
When  a  shareholder  continues  delinquent  for  such  a 
period  there  should  be  an  inquiry  into  the  circum- 
stances and  a  just  disposition  of  the  matter. 

In  drafting  the  rules  of  an  association  too  much 
care  can  not  be  exercised  in  order  that  they  may  be 
not  only  legal  but  equitable.  The  constitution  and 
by-laws  should  be  so  explicit  and  unequivocal  that 
every  member  may  understand  the  obligations  he 
takes  upon  himself  and  the  penalties  to  which  he  lays 
himself  liable  when  he  becomes  a  stockholder. 

Directors  should  also  have  the  right  to  demand 
and  enforce  the  resignation  of  a  member  for  any  gross 
impropriety  of  conduct  which  would  make  his  further 
connection  with  the  association  unwise  or  undesirable. 

RIGHTS  OF  MEMBERS. 

Members  may  occupy  three  relations  toward  an 
association.  Certain  rights  are  vested  in  them  as 
members  of  the  corporation,  or  corporators.  When  a 
member  is  an  investor  only  in  the  association,  he  is 
possessed  of  certain  special  rights ;  and  in  like  man- 
ner if  a  member  becomes  a  borrower  he  secures  cer- 
tain other  special  rights. 

CORPORATE  RIGHTS  OF  MEMBERS. 

Every  stockholder  has  the  right  to  attend  all  the 
corporate  meetings  of  the  association,  whether  they 
be  the  regular  annual  or  semi-annual  meetings,  or 


82  MANUAL  FOR 

special  meetings  called  for  some  particular  purpose. 
He  has  the  right  to  be  duly  notified  of  the  time  and 
place  of  all  meetings  and  to  take  part  in  their  proceed- 
ings. In  some  states  and  in  some  associations  a  mem- 
ber has  but  one  vote  whatever  number  of  shares  he 
may  hold.  In  other  associations  he  has  one  vote  for 
each  share  he  holds.  In  still  others,  in  the  election  of 
officers,  he  casts  one  vote  for  each  share  he  holds, 
while  on  matters  of  general  business  he  has  but  one 
vote.  In  Ohio  the  law  now  provides  that  a  member 
can  hold  as  many  shares  as  he  desires,  but  may  not 
vote  but  twenty.  These  qualifications  should  be 
clearly  and  definitely  stated  in  the  constitution. 
The  constitution  should  also  declare  plainly  for 
or  against  the  right  of  a  member  to  be  represented 
and  to  vote  by  proxy,  and  if  the  right  is  allowed, 
should  define  the  mode  in  which  it  shall  be  exercised. 
In  some  states  this  matter  is  determined  by  the 
statutes. 

A  member  has  the  right  to  have  access  to  the 
books  of  the  association  at  such  times  and  to  such  ex- 
tent as  will  not  interfere  with  the  business  of  the 
association  and  the  work  of  its  officers.  Owing  to  the 
inconvenience,  confusion,  and  annoyance  which  may 
arise  from  a  large  number  of  members  having  frequent 
access  to  the  books  in  their  efforts  to  examine  them 
intelligently,  it  is  well  for  members  to  forego  this 
privilege  as  far  as  possible,  and  to  refer  all  matters 
requiring  examination  to  the  auditing  committee,  or 
other  authority  empowered  to  examine  into  and  to 
report  upon  the  business  of  the  association.  A  mem- 
ber has  the  right  to  hold  office  if  elected  or  appointed 
in  the  prescribed  form.  A  member  may  bring  suit 


BUILDING  ASSOCIATIONS.  83 

against  an  association  upon  the  same  conditions  upon 
which  a  person  not  a  member  could  bring  suit.  A 
member  may,  in  behalf  of  himself  and  his  fellow- 
members,  institute  legal  proceedings  against  unfaith- 
ful officers  to  compel  lawful  action  on  their  part  or  to 
restrain  them  from  unlawful  action.  This  right 
should,  of  course,  never  be  used  except  when  such 
action  is  based  upon  the  most  convincing  evidence. 
Under  certain  circumstances  a  member  may  bring 
action  in  court  to  have  an  association  dissolved.  At 
the  termination  of  an  association  each  member  has  the 
right  to  his  equitable  share  of  the  profits. 

RIGHTS  AS  INVESTORS. 

A  person  who  invests  his  money  in  the  stock  of  a 
building  association  has  a  right  to  share  in  the  profits 
of  the  undertaking  in  such  way  as  is  provided  by  the 
statutes  and  the  rules  under  which  it  operates.  He 
also  has  the  right  to  withdraw  his  funds  and  member- 
ship at  such  times  as  suit  his  convenience.  But  the 
chief  and  most  important  privilege  of  a  shareholder  or 
investor  is  that  of  receiving  loans  or  advances  from 
the  association.  It  is  this  privilege  which  makes 
membership  in  an  association  attractive  and  popular 
among  that  class  of  persons  for  whose  benefit  building 
associations  are  organized  and  are  fostered  by  appro- 
priate legislation.  Unless,  therefore,  an  association 
has  adopted  rules  to  the  contrary,  a  stockholder  has 
the  first  claim  upon  its  surplus  funds  provided  he  is 
willing  to  pay  a  sufficient  premium  and  can  give  satis- 
factory security. 


84  MANUAL  FOR 

DIVIDENDS. 

The  statutes  as  a  rule  authorize  associations  to  de- 
clare and  to  pay  dividends  out  of  the  profits  of  their 
business,  annually  or  otherwise.  These  profits  are 
calculated  at  the  termination  of  each  fiscal  year  or 
half-year.  The  profits,  when  declared,  are  distributed 
among  the  members  pro  rata,  according  to  the  amount 
standing  to  the  credit  of  each  member  at  the  begin- 
ning of  the  term,  and  to  the  amount  each  has  paid  in 
during  the  term,  and  to  the  length  of  time  it  has  been 
in.  The  rules  and  practice  in  reference  to  dividends 
vary  in  different  associations.  On  this  account  it  is 
not  possible  to  lay  down  general  rules  governing  this 
matter.  The  rules  of  every  association  should  be 
explicit  in  reference  to  the  matter  of  dividends,  for 
profit-sharing  is  one  of  the  main  features  which  recom- 
mend associations  to  popular  favor.  The  rules  must 
be  so  drawn  that  each  member  shall  share  equitably 
in  the  profits.  In  the  organization  of  a  new  associa- 
tion the  plan  upon  which  it  shall  operate  in  reference 
to  dividends  should  be  carefully  considered,  for  this 
may  have  much  to  do  with  its  prosperity  and  success. 

RIGHT  OF  WITHDRAWAL. 

A  member  who  is  simply  an  investor  and  not  a 
borrower  has  the  right  to  withdraw  from  an  associa- 
tion without  being  subject  to  a  forfeiture  of  the  money 
already  paid  in.  For  the  protection  of  the  business 
of  the  association  this  right  must  be  exercised  under 
proper  restrictions.  The  rules  of  every  association 
should  prescribe  in  detail  the  method  of  withdrawal. 
Usually  a  member  is  required  to  give  formal  notice  in 
writing  to  the  secretary  of  his  intention  to  withdraw. 


BUILDING  ASSOCIATIONS.  85 

This  notice  should  be  entered  in  a  book  kept  for  this 
purpose,  and  the  attention  of  the  directors  should 
immediately  be  called  to  it.  In  Massachusetts,  asso- 
ciations are  compelled  by  statute  to  keep  a  book  for 
the  special  purpose  of  recording  notices  of  withdrawal, 
which  is  called  the  "Withdrawal  Book."  Members 
desiring  to  withdraw  enter  their  notices  in  this  book 
in  regular  order  including  the  date  of  entry.  The 
applications  for  withdrawal  are  then  acted  upon  in 
regular  order.  Directors  should  be  required  to  set 
aside  from  time  to  time  a  fund  to  be  held  for  the 
accommodation  of  members  desiring  to  withdraw. 

While  the  primary  idea  of  the  building  and  loan 
association,  as  already  stated  and  popularly  under- 
stood, is  to  enable  members  to  become  owners  of 
homes,  yet  it  is  not  the  province  of  an  association  to 
inquire  into  the  purpose  for  which  a  member  desires 
to  accumulate  money.  A  member  may  therefore  use 
an  association  not  only  for  the  purpose  of  securing  a 
home,  but  as  he  would  a  savings  bank  for  a  variety  of 
purposes.  He  may  desire,  (i)  to  accumulate  a  fund  for 
the  purpose  of  embarking  in  some  business  enterprise, 
or,  (2)  for  the  purpose  of  meeting  some  approaching 
obligation,  or,  (3)  simply  of  securing  a  safe  depositary 
for  his  funds,  or,  (4)  of  securing  a  good  rate  of  interest 
on  his  funds  while  deposited.  It  would  defeat  the 
purposes  of  some  of  the  members  if  there  were  no 
proper  provisions  made  for  the  withdrawal  of  their 
money  and  membership  at  such  times  as  suit  their 
plans  and  convenience.  Hence  it  is  that  provision 
for  withdrawals  must  be  made  in  the  rules  of  the 
associations. 

The  question  has  been  debated  as  to  what  share  in 


86  MANUAL  FOR 

the  profits  of  an  association  a  withdrawing  member  is 
entitled.  It  has  been  held  in  some  cases  by  the  courts 
that  a  withdrawing  member  does  not  possess  the  right 
to  claim  a  share  of  the  undeclared  profits  of  an  asso- 
ciation. Such  member  receives  the  amount  he  has 
paid  in  and  his  share  of  the  profits  credited  and  un- 
drawn at  the  time  of  the  last  preceding  declaration  of 
dividends,  after  there  has  been  deducted  from  this 
total  amount  any  fines  or  other  charges  still  owing 
by  him.  If  the  association  has  suffered  a  loss,  it  is 
the  rule  to  deduct  from  the  amount  which  a  with, 
drawing  member  has  paid  in,  an  equitable  portion  as 
the  directors  may  deem  necessary  for  the  protection 
of  the  remaining  shareholders.  In  the  case  of  a  pro- 
spective loss,  the  settlement  of  which  may  be  in  the 
hands  of  an  arbitrator  or  receiver,  or  may  be  pending 
in  court,  it  is  usual  to  withhold  some  portion  of  a 
withdrawing  member's  money  until  adjudication,  when 
he  is  entitled  to  receive  any  and  all  residues  of  such 
money  withheld,  which  equitably  belong  to  him. 

A  member's  privileges  in  the  association  cease  as 
soon  as  he  gives  notice  in  proper  form  of  his  intention 
to  withdraw.  After  that  time  he  can  not  transfer  his 
stock.  A  withdrawing  member  is  a  creditor  of  the 
association  until  his  money  is  paid  him.  As  such 
he  may  bring  action  to  collect  the  amount  due  if  the 
association  does  not  pay  him  in  his  turn  and  when 
the  money  is  in  the  treasury. 

The  rules  of  an  association  should  confer  some 
discretionary  power  upon  the  directors  in  reference 
to  withdrawals  to  be  exercised  in  certain  classes  of 
cases. 


BUILDING  ASSOCIATIONS.  87 

RIGHTS  OF  BORROWERS. 

As  already  explained  the  primary  purpose  of  a 
building  and  loan  association  is  to  loan  money  to  its 
members.  It  follows,  therefore,  that  every  member 
of  an  association  who  complies  with  its  rules  has  a 
right  to  become  a  borrower  from  it.  But  in  negotiat- 
ing a  loan  he  generally  becomes  a  competitor  with 
some  of  his  fellow-members.  A  member  desiring  a 
loan  must,  therefore,  be  prepared  to  outbid  his  fellow- 
members  and  also  to  furnish  satisfactory  security.  It 
should  be  remarked  in  this  connection,  that  some 
associations  are  allowed  to  invest  their  money  in  real 
estate  or  to  loan  it  to  persons  not  members.  In  such 
cases  associations  are  not  compelled,  unless  by  special 
provision,  to  loan  funds  to  members  when  the  money 
can  be  used  to  better  advantage  in  other  directions. 
Questions  of  this  character  must  be  determined  by  the 
statutes  and  rules  under  which  the  associations  are 
organized.  The  amount  of  money  which  a  member 
is  entitled  to  borrow  is  usually  regulated  by  law  and 
the  constitution  of  the  association. 

A  member  who  is  a  borrower  from  an  association, 
even  though  in  addition  to  other  security  he  pledges 
his  stock  as  security  for  the  loan,  continues  a  member 
in  every  sense  and  must  discharge  all  the  duties  and 
may  enjoy  all  the  rights  and  privileges  of  his  original 
membership  except  the  right  of  withdrawal  and  such 
other  rights  as  may  be  abridged  by  the  special  pro- 
visions in  the  contract  for  the  loan.  A  borrower  has 
the  right  at  such  times  as  are  stated  in  the  rules  to 
return  to  the  association,  in  the  aggregate,  the  sum 
of  money  for  the  payment  of  which,  in  installments, 
his  obligation  calls.  This  must,  of  course,  include 


88  MANUAL  FOR 

accrued  interest  angl  other  lawful  charges.  He  can, 
in  this  way,  by  complying  with  the  constitutional 
provisions  and  restrictions  governing  such  matters, 
release  his  stock,  or  redeem  property  which  he  may 
have  mortgaged  to  the  association.  After  such  repay- 
ment, the  stockholder  continues  his  membership 
upon  the  original  conditions  and  may  now  exercise 
the  right  of  withdrawal.  The  exact  amount  of  money 
to  be  paid  by  a  borrower  in  the  aggregate  to  dis- 
charge his  obligation  must  be  determined  by  the  rules 
of,  and  settlement  should  be  made  from  the  books  of, 
the  association.  This  is  another  matter  which  should 
be  carefully  guarded  and  provided  for  in  the  rules 
and  the  contracts,  since  it  has  been  a  prolific  cause 
of  litigation. 

The  executor  or  administrator  of  the  estate  of  a 
deceased  member  may  continue  the  membership  if  he 
complies  with  the  necessary  conditions  and  regula- 
tions. But  if  he  does  not  find  it  possible  or  desirable 
to  do  this,  it  has  been  held  that  the  estate  is  entitled 
to  the  same  privileges  and  allowances  as  if  the  bor- 
rower had  voluntarily  paid  off  the  loan.  A  borrowing 
member  who  does  not  keep  up  his  payments  is  not 
entitled  to  the  benefits  received  by  those  who  meet 
their  obligations.  His  only  offset  against  the  claims 
of  the  association  is  the  actual  payments  he  has 
already  made  in  the  way  of  regular  dues  and  of  inter- 
est upon  his  loans.  Such  members  are  also  liable 
for  their  proportionate  share  of  the  expenses  and 
losses  of  the  association.  A  borrowing  member,  when 
sued  by  the  association,  does  not  forfeit  his  rights  of 
membership,  and  is  still  liable  for  his  regular  dues. 
An  association  must,  even  after  suit  is  brought,  accept 


BUILDING  ASSOCIATIONS.  89 

the  payment  of  a  loan  with  accrued  interest  and 
costs  and  other  lawful  charges  if  tendered.  Such  offer 
is  regarded  as  a  legal  tender.  If  the  offer  is"  rejected 
the  borrower  is  entitled  to  cease  paying  interest  upon 
his  debt  and  to  the  remedy  of  an  adjudication  by 
court. 

DUTIES  OF  BORROWERS. 

The  duties  of  a  borrower  are  sufficiently  indicated 
in  the  preceding  sections.  He  must  not  only  keep  up 
his  original  obligations  as  a  member  but  must  meet 
his  contracts  for  the  payment  of  premiums  and  inter- 
est and  must  look  after  the  character  and  sufficiency 
of  his  security.  Not  only  are  his  own  welfare  and 
good  name  dependent  upon  his  faithfulness,  but  the 
prosperity  of  the  association  and  the  interests  of  his 
fellow-members  are  involved  also  in  his  obligation. 
All  of  these  things  put  a  heavy  responsibility  upon 
the  borrower  which  by  every  honorable  consideration 
he  must  faithfully  discharge. 


CHAPTER  IX. 


LOANS  AND  SECURITIES. 


SALE  OF  MONEY. 

To  the  end  that  members  of  an  association  may  be 
protected  in  their  right  to  receive  loans,  and  that  all 
may  have  a  fair  opportunity  to  secure  this  privilege, 
the  statutes  in  a  number  of  states,  and  the  rules  of 
most  associations,  require  that  at  stated  times  the 
officers  shall  offer  the  money  on  hand,  if  it  amounts 
to  a  certain  sum,  for  sale  to  the  stockholders,  or,  in 
some  cases,  to  any  other  persons  willing  to  become 
stockholders. 

The  rules  or  the  order  of  business  should  specify 
the  time  and  place  at  which  the  money  of  an  associa- 
tion will  be  offered  for  loan,  and  provision  should 
always  be  made  so  that  all  stockholders  may  be  in- 
formed of  this.  It  usually  happens  that  a  number  of 
persons  desire  to  become  borrowers  and  hence  there 
is  competition  for  the  use  of  the  money.  When  the 
time  comes  for  the  sale,  the  president  or  any  director 
or  other  officer  or  member  who  may  be  appointed 
auctioneer  by  the  directors,  makes  announcement 
that  the  association  offers  so  many  shares  or  parts  of 

(90) 


MANUAL  FOR  BUILDING  ASSOCIATIONS.      91 

shares  for  sale.  Bids  are  then  received.  These  bids 
are  in  the  form  of  offers  to  pay  certain  premiums  in 
regular  installments — weekly  or  otherwise  as  the  case 
may  be  —  for  each  share.  The  loan  is  awarded  to  the 
highest  bidder,  provided  the  security  offered  is  ac- 
ceptable and  provided  that,  if  the  bidder  is  a  non- 
member,  he  becomes  a  member  before  the  money  is 
advanced  to  him.  Directors  have  the  right  to  reject 
bids  if  the  security  offered  is  not  satisfactory.  In 
such  cases  the  loan  goes  to  the  next  highest  bidder 
or  the  shares  are  put  up  and  sold  again.  Money  is 
loaned  in  amounts  equal  to  the  par  value  of  shares  or 
some  specified  fractional  part  thereof,  usually  not  less 
than  one-fifth.  Generally  when  bids  of  this  kind  are 
received  and  a  loan  is  made  at  a  certain  premium  the 
directors  will,  if  they  have  additional  money  to  spare, 
allow  other  persons  to  take  loans  at  the  same  premium 
without  asking  for  bids  again. 

PREMIUMS. 

A  premium  is  a  bonus  which  a  borrowing  member 
agrees  to  pay  for  the  privilege  of  having  money 
advanced  to  him.  It  is,  in  effect,  the  difference  be- 
tween the  par  value  of  his  stock  and  the  actual  amount 
advanced  to  him.  It  represents  the  amount  he  is 
willing  to  sacrifice  in  order  to  anticipate  the  ultimate 
value  of  his  stock  by  obtaining  the  immediate  use 
of  the  money  which  the  stock  will  be  worth  to  him 
at  winding  up. 

The  meaning  of  the  term,  premium,  may  perhaps 
be  better  understood  if  the  process  in  the  sale  of 
money  is  reversed.  Let  us  suppose  that  when  an 
association  has  accumulated  a  sum  of  money  which 


92  MANUAL  FOR 

is  to  be  loaned  to  members,  instead  of  the  announce- 
ment of  a  sale  of  money  to  the  highest  bidder,  the 
announcement  be  that  the  association  will  purchase 
shares  of  members  at  the  lowest  offer.  A  member 
has,  say  five  shares,  which  will  be  worth  at  maturity 
$500  each,  or  a  total  of  $2,500.  On  these  shares  he 
has  agreed  to  pay  his  regular  weekly  installments 
until  they  are  paid  up.  He  now  offers  to  sell  the 
prospective  value  of  these  shares  to  the  association 
for  a  certain  net  sum  of  money,  the  shares  to  be 
assigned  to  the  association  immediately,  and  a  note  or 
bond  to  be  given  for  the  continued  regular  payment 
of  the  weekly  dues,  this  obligation  to  be  secured  by  a 
mortgage  on  the  real  estate  purchased  with  the  money 
advanced  or  on  other  real  estate,  or  by  some  other 
satisfactory  security.  The  difference  between  the  par 
value  of  the  member's  stock  at  maturity  and  the  net 
amount  he  receives  for  it  when  thus  sold  to  the  asso- 
ciation again  represents  the  premium  which  he  pays 
for  the  immediate  use  of  the  money  thus  secured. 
Some  have  questioned  as  to  whether  premiums  should 
be  charged  at  all  or  not.  It  is  argued  that  associa- 
tions should  not  make  any  charge  for  use  of  moneys, 
and  should  pay  off  applications  in  the  priority  in 
which  they  are  filed.  In  some  associations  this  system 
has  been  adopted  with  great  success. 

It  has  been  held  by  the  courts  that  boards  of 
directors  can  not  establish  fixed  rates  of  premium. 

NATURE  OF  A  LOAN. 

The  loaning  or  advancement  of  money  to  members 
is  one  of  the  peculiar  and  distinguishing  functions  of 
building  and  loan  associations.  This  advancement  of 


BUILDING  ASSOCIATIONS,  93 

money  is  usually,  but  not  always,  an  incident  to  the 
work  of  the  association  in  discharging  its  primary 
function  of  enabling  its  members  to  purchase  or  build 
homes.  But  whether  the  money  advanced  is  for  this 
or  some  other  purpose,  the  loaning  of  money  to  mem- 
bers constitutes  the  chief  actual  business  of  most 
associations.  This  is  a  transaction  which  is,  in  most 
of  its  elements,  so  different  from  other  ordinary  busi- 
ness proceedings  that  it  must  be  considered  and 
governed  by  special  rules  applying  to  it  alone.  The 
borrowing  member  is  himself  an  integral  part  of  the 
association  from  which  he  borrows,  owing  to  it  cer- 
tain obligations  and  duties  which  he  must  fulfill. 
When  he  becomes  a  borrower  he  receives  a  certain 
preference  over  his  fellow- members  for  which  he 
renders  to  the  association  a  consideration  which  be- 
comes an  equivalent  to  his  fellow-members  for  the 
preference  which  he  enjoys.  In  extending  to  him  a 
loan  the  association  assumes  a  risk  for  which  the  pro- 
tection of  his  fellow-members  demands  that  he  furnish 
a  sufficient  and  adequate  security  and  guarantee 
against  loss.  This  makes  the  transaction  a  compli- 
cated one  in  the  adjustment  of  which  there  has  been 
no  little  confusion  in  the  history  of  associations.  It 
has  been  the  source  of  a  great  amount  of  litigation  in 
England  and  in  the  different  states  of  this  country. 
As  a  consequence  of  this  the  exact  status  of  the  bor- 
rower toward  the  association  and  of  the  association 
toward  the  borrower  is  now  becoming  more  clearly 
denned.  The  most  that  can  be  said  here  is  that  the 
constitution  and  rules  of  the  association  should  be  so 
carefully  drawn  in  conformity  with  the  statutes  and 
should  state  so  fully  the  conditions  under  which 


94  MANUAL  FOR 

loans  can  be  made  to  members,  and  should  so  fully 
describe  the  methods  of  procedure  that  mistakes  may 
be  avoided. 

In  making  or  carrying  into  effect  the  rules  relating 
to  the  loaning  of  money  to  stockholders,  it  should  be 
borne  in  mind  that  the  borrower  continues  an  active 
member  of  the  association  and,  as  a  partner  in  its 
affairs,  is  interested  in  the  enforcement  of  the  con- 
tract against  himself  as  a  borrower,  and  that,  in  a 
contract  between  an  association  and  a  borrowing 
member,  whatever  goes  outside  of  the  statutory  and 
constitutional  provisions  is  invalid. 

MORTGAGES. 

The  ordinary  security  given  by  a  member  for  loans 
and  advancements  made  to  him  is  in  the  form  of  a 
mortgage  upon  real  or  leasehold  estate  which  he 
already  holds  or  which  he  purchases  with  the  money 
advanced  to  him.  The  taking  of  these  mortgages  is 
one  of  the  most  common  incidents  in  the  work  of  an 
association  in  fulfilling  the  functions  for  which  it  is 
established.  A  member  may  give  a  mortgage  upon 
freehold  or  leasehold  property  for  which  he  can  show 
a  clear  legal  title.  He  may  give  a  mortgage  upon  the 
real  estate  of  another  person  who  in  due  form  submits 
his  property  for  this  purpose.  Mortgages  must  be 
drawn  directly  in  accordance  with  the  statutes  under 
which  an  association  operates  and  with  its  own  con- 
stitution and  rules.  Since  the  statutes  under  which 
associations  are  established  differ  in  the  several  states, 
and  since  constitutions  and  rules  governing  this 
matter  vary  in  different  associations,  there  are  many 
forms  of  mortgages  in  use.  To  enter  into  a  full  dis- 


BUILDING  ASSOCIATIONS.  95 

cussion  of  these  forms  would  be  foreign  to  the  pur- 
pose of  this  work.  Two  forms  in  common  use  are 
printed  in  another  part  of  this  book,*  an  examination 
of  which  will  assist  in  arranging  for  this  feature  of 
the  work  of  an  association.  It  is  sufficient  to  insist 
here  that  the  rules  be  so  carefully  drawn  in  reference 
to  this  subject  that  mistakes  will  not  be  possible. 
The  mortgage  itself  should  contain  the  terms  and 
conditions  upon  which  it  shall  be  foreclosed,  and 
should  specify  the  disposition  to  be  made  of  the  funds 
realized  from  the  sale  of  the  property.  In  case  of  fore- 
closure, where  the  sum  realized  is  insufficient  to  liqui- 
date the  entire  amount  of  the  debt,  the  member  is 
still  liable  for  the  balance. 

OTHER  SECURITIES. 

Money  may  be  advanced  to  members  upon  nation- 
al, state,  county,  or  city  bonds  as  collateral  security, 
when  such  action  is  authorized  by  the  statutes  and 
the  rules.  The  acceptance  of  such  collateral  secur- 
ities is  in  the  discretion  of  the  directors.  The  bor- 
rower must  give  his  note  for  the  amount  received  and 
the  interest  to  be  paid  thereon,  and  transfer  his  stock 
to  the  association.  The  note  should  give  the  name, 
number,  amount,  and  par  value,  of  the  bond  or  bonds 
given  as  collateral  security,  and  should  name  the  con- 
ditions upon  which  the  security  becomes  forfeited  to 
the  association.  Forfeitures  usually  become  opera- 
tive if  the  borrower  shall  fail  to  pay  up  his  regular 
dues  and  the  interest  for  a  certain  term,  say  three 
months,  at  most  not  longer  than  six  months.  The 

*)  See  Chapter  on  Forms. 


96  MANUAL  FOR 

directors  may,  after  notifying  him,  declare  his  security 
forfeited  and  may  proceed  to  dispose  of  the  bonds  in 
the  most  profitable  manner  for  the  purpose  of  liquid- 
ating his  obligation.  The  borrower  may  be  allowed 
to  renew  his  note  from  time  to  time  at  the  discretion 
of  the  directors. 

ASSIGNMENT  OF  STOCK. 

When  a  member's  stock  is  assigned  to  an  associa- 
tion as  collateral  security  for  a  loan  the  assignment  is 
usually  required  to  be  made  in  absolute  form.  But 
nevertheless  the  association  can  not  use  or  dispose  of 
the  stock  except  for  the  purpose  for  which  the  assign- 
ment is  made.  The  stock  is  to  be  held  by  the  associa- 
tion until  it  is  paid  up  by  the  member.  The  associa- 
tion then  cancels  the  stock  and  returns  to  the  member 
his  bond.  But  if  the  member  fails  to  keep  up  his 
payments  on  the  assigned  stock,  the  association  may 
declare  the  stock  forfeited,  and  apply  what  he  has 
already  paid  in  toward  the  liquidation  of  his  debt,  and 
may  transfer  the  shares  to  some  new  applicant  or 
applicants  for  membership.  In  case  of  delinquency 
on  the  part  of  a  borrower  who  has  assigned  his  stock 
to  the  association  as  collateral  security,  the  association 
first  avails  itself  of  the  amount  he  has  paid  in  on  the 
stock,  and  then  proceeds  in  an  effort  to  realize  the 
balance  of  his  debt  from  the  sale  of  his  mortgaged 
property  and  any  bonds  or  other  collateral  security  he 
may  have  furnished. 

SALE  OF  SECURITIES;  DISPOSITION  OF  PROCEEDS. 

Directors  of  associations  are  bound  to  dispose  of 
property  on  foreclosure  of  mortgages  or  of  forfeited 


B  UILDING  ASSOCIA  TIONS.  97 

securities  on  the  most  advantageous  terms.  This  is 
necessary  both  for  the  protection  of  the  association 
and  in  justice  to  the  delinquent  borrower.  The  pro- 
ceeds derived  from  the  sale  of  securities  must  be  ap- 
plied as  follows:  (i)  To  payment  of  dues;  (2)  to 
payment  of  interest ;  (3)  to  payment  of  premiums ; 
(4)  to  payment  of  fines ;  and  (5)  to  payment  of  costs. 
If  any  balance  remains  it  must  be  paid  over  to  the 
owner  and  his  receipt  in  full  taken.  The  rules  should 
be  explicit  in  reference  to  the  forfeiture  and  sale  of 
securities,  for  this  step  involves  the  highest  interests 
of  an  association  and  of  its  members. 

APPRAISEMENT  OF  REAL  ESTATE. 

This  is  one  of  the  most  important  features  of 
building  association  operations.  It  is  in  the  accept- 
ance of  securities  that  the  association  assumes  its 
risks.  Every  association,  of  course,  has  rules  govern- 
ing this  matter.  Nevertheless,  when  the  appraisers 
come  to  the  actual  discharge  of  their  duties  they  will 
find  the  rules  insufficient  to  cover  all  the  details,  and 
that  many  incidental  matters  must  be  considered  and 
decided  in  their  own  discretion.  A  few  general  sug- 
gestions in  this  connection  will  be  of  value,  especially 
in  new  associations  and  to  those  inexperienced  in 
such  matters. 

1.  The  members  of  the  association  most  capable 
by  intelligence  and  experience  should  be  on  the  ap- 
praising committee. 

2.  The  appraisers  should  always  base  their  valu- 
ation of  property  upon  information  obtained  direct  by 
themselves  by  observation  and  personal  investigation, 
and  should  not  depend  upon  hearsay  from  any  source. 

;/v-A--^^§v 

^  n     rrrnrSJ  O^ivW. 


98     MANUAL  FOR  BUILDING  ASSOCIATIONS. 

3.  They  should  inform  themselves  fully  in  refer- 
ence to  the  actual  status  of  the  property,  as  to  its 
rightful  ownership,  its  freedom  from  incumbrance,  and 
other  such  matters. 

4.  They  should  consider  its  situation   and   con- 
dition   with    reference     to    roads,     drainage,    water, 
gas,  etc. 

5.  If  the  property  is  improved,  they  should  note 
the  character  of  the  building,  the  quality  of  material 
and  of  workmanship,  its  arrangement,  number  and 
size  of  rooms,  and  also  incidental  matters  in  the  way 
of  out-houses,  walks,  fences,  grading,  shade- trees,  etc. 

6.  In  making  up  the  valuation  they  should  give 
full  details  of  items  for  land  and  buildings  separately. 

7.  The  valuation  should  be  based  upon  the  in- 
trinsic worth,  and  not  upon  competitive  or  speculative 
estimates. 

8.  They  should  also  inquire  into  the  borrower's 
relation     to     the     association,     reviewing    his    pay- 
ments, his  ability  to  pay,  etc. 

This  last  is  very  important,  since  many  serious 
troubles  arise  from  members  agreeing  to  pay  more 
than  they  are  capable  of  doing. 


CHAPTER,  XI. 


C 


ORPORATE    UOVERNMENT. 


THE  CORPORATE  MEETING. 

A  corporate  meeting  is  a  meeting  of  the  members 
of  an  association  regularly  assembled.  Meetings  may 
be  general  or  special.  The  members  thus  assembled 
in  a  corporate  meeting  constitute  the  supreme  power 
of  the  association.  But  in  their  action  they  are  never- 
theless subject  to  restrictions.  If  the  association  is 
organized  and  incorporated  under  general  or  special 
laws  of  the  state,  the  corporate  meeting  must  confine 
its  actions  within  the  limits  laid  down  in  the  charter 
and  the  statutes  under  which  it  acts.  The  corporate 
meeting  fixes  its  own  constitution  and  by-laws  in 
accordance  with  statutory  limitations.  But  after  these 
are  once  fixed  it  has  no  power  to  change  them  except 
in  accordance  with  the  rules  which  it  has  established. 
Where  associations  are  not  organized  and  incor- 
porated under  special  charters  they  are,  of  course, 
subject  to  the  general  statutes  and  laws  of  equity  like 
other  incorporated  companies.  The  entire  association 
is  bound  by  the  acts  of  a  majority  of  its  members 
when  those  acts  are  legal  and  in  due  form.  In  the 

(99) 


zoo  MANUAL  FOR 

absence  of  special  provision  in  the  rules  of  the  asso- 
ciation a  question  may  arise  as  to  what  is  meant  by  a 
majority.  It  has  been  held  that  an  association  is 
bound  by  the  acts  of  a  •  majority  of  those  present  at  a 
regular  meeting  whether  they  constitute  a  majority  of 
the  members  or  not.  it  has  been  held  further  that  a 
majority  does  not  necessarily  constitute  a  majority  of 
all  members  present,  but  of  all  the  members  present 
and  voting.  But  it  is  better  that  the  rules  of  the  asso- 
ciation should  state  definitely  what  proportion  of  the 
membership  shall  constitute  a  quorum  for  the  trans- 
action of  business.  Then  if  this  number  is  not 
present  a  meeting  can  transact  no  business  except 
to  adjourn  to  some  other  date.  Where  the  statutes, 
or  the  rules  of  the  association,  do  not  fix  the  quorum, 
the  rule  is,  that  a  majority  of  all  those  present  and 
entitled  to  vote  at  a  duly  called  meeting,  shall  con- 
stitute a  quorum. 

Where  the  statutes  do  not  determine  the  right  of 
a  member  to  be  represented  by  proxy  the  question 
should  be  settled  specifically  in  the  constitution  and 
by-laws. 

GENERAL  MEETINGS. 

The  general  meetings  of  associations  are  those 
corporate  meetings  which  occur  at  the  stated  times 
fixed  by  the  constitution  or  by-laws.  The  share- 
holders should  meet  at  least  once  in  six  months, 
generally  on  the  first  meeting  night  in  the  month 
following  the  close  of  each  fiscal  half  year.  The 
meetings  are  held  at  the  place  designated  by  the 
board  of  directors.  Each  member  must  be  advised  of 
the  time  and  place  of  the  meeting,  either  by  individ- 


B  UILDING  ASSOCIA  TIONS.  101 

ual  notification  by  letter  or  otherwise,  or  by  advertise- 
ment in  some  paper  of  general  circulation  regularly 
issued  in  the  vicinity.  The  usual  business  of  such 
meetings  is  the  election  of  officers  and  the  determin- 
ing of  the  general  policy  and  management  of  the 
association.  The  desires  of  the  members  may  be  ex- 
pressed through  the  election  of  certain  persons  to  fill 
the  offices,  who  are  pledged  to  a  certain  line  of  con- 
duct in  the  management  of  the  affairs  of  the  associa- 
tion. 

The  business  of  the  general  or  corporate  meeting 
should  be  conducted  according  to  the  order  of  busi- 
ness laid  down  in  the  rules.  The  reports  of  officers  is 
a  prominent  feature  of  these  meetings.  These  reports, 
when  represented  in  proper  form,  give  the  members  a 
clear  idea  of  the  business  of  the  association,  and  enable 
them  to  determine  intelligently  as  to  the  policy  for  its 
future  management. 

SPECIAL  MEETINGS. 

Provision  should  be  made  in  the  constitution  and 
by-laws  for  the  calling  of  special  meetings.  These 
ought  to  be  so  drawn  that  the  officers,  whose  duty  it 
is  to  call  such  meetings,  have  no  discretion  in  the 
matter,  but  should  be  compelled  to  act  upon  the  re- 
quest of  a  certain  number  of  members.  There  ought 
to  be  also  a  rule  that,  in  the  calling  of  special  meet- 
ings, all  the  members  must  be  notified  in  proper 
manner,  and  that  otherwise  the  proceedings  of  the 
meetings  shall  be  invalid.  Such  provisions  are  neces- 
sary in  order  to  protect  properly  the  rights  of  mem- 
bers. In  the  absence  of  these  rules,  it  has  been  held 
under  the  general  laws  that  each  member  must  have 


102  MANUAL  FOR 

personal  notice,  that  a  reasonable  time  must  be  given, 
and  that  the  call  must  be  issued  by  authority  com- 
petent to  call  a  meeting.  But  if  all  persons  entitled 
to  vote  unanimously  consent,  notice  of  meetings  may 
be  waived  and  the  proceedings  will  be  valid.  Special 
meetings  can  transact  no  other  business  than  that 
named  in  the  call. 

An  adjourned  meeting  may  transact  any  business 
that  may  have  been  lawfully  transacted  at  the  original 
meeting.  The  acts  of  a  meeting  irregularly  convened 
are  not  binding. 

MANAGEMENT  OF  CORPORATE  MEETINGS. 

A  few  suggestions  in  regard  to  the  management 
of  corporate  meetings  will  not  be  out  of  the  way. 
Under  our  democratic  form  of  civil  government, 
citizens,  through  the  influence  of  our  ordinary  polit- 
ical methods,  become  educated  to  the  habit  of  delegat- 
ing their  authority  to  others.  The  result  is  that 
many  good  citizens  neglect  and  ignore  their  duty  as 
such  and  leave  public  affairs  to  be  directed  by  self- 
seeking  politicians.  This  custom  is  too  often  carried 
into  building  associations  and  other  corporate  bodies. 
This  ought  not  to  be.  Every  member  of  an  associa- 
tion should  keep  himself  thoroughly  informed  in 
reference  to  its  business  and  management  at  all  times. 
Then  he  should  not  fail  to  be  present  in  person  at 
every  corporate  meeting. 

At  any  corporate  meeting  it  should  be  the  busi- 
ness of  some  one,  usually  the  President  or  the  Secre- 
tary, to  make  a  clear  statement  of  the  purpose  of  the 
meeting,  and  to  present  all  the  facts  in  connection 
with  the  work  of  the  association  which  bear  upon  the 


BUILDING  ASSOCIATIONS.  103 

matter  to  be  considered.  It  is  well,  also,  from  time 
to  time  in  such  meetings,  both  for  officers  and  mem- 
bers, to  review  the  provisions  of  their  charter,  that 
they  may  be  sure  that  their  operations  are  all  kept 
within  the  proper  legal  and  constitutional  bounds. 
It  is  easy,  when  the  members  and  officers  of  an  asso- 
ciation are  careless,  for  its  methods  and  operations 
gradually  to  slip  outside  of  the  limits  which  they  were 
originally  intended  to  occupy. 

At  any  regular  corporate  meeting  there  should 
always  be  a  clear,  business-like  statement  of  what  the 
association  has  accomplished  during  the  past  year, 
and  what  it  is  expected  to  accomplish  during  the 
coming  year.  These  facts  being  before  the  members, 
they  are  able  to  determine  whether  the  association  is 
accomplishing  the  work  for  which  it  wa*s  intended. 
If  it  is,  well  and  good  ;  if  not,  measures  must  be  taken 
to  correct  its  mistakes. 

Members  should  also  bear  in  mind  that  no  associa- 
tion is  of  any  worth  or  power,  simply  from  the  fact 
it  is  an  association.  Its  power  and  efficiency  is  only 
the  joint  power  and  efficiency  of  the  men  and  women 
who  compose  it.  If  these  do  not  attend  its  meetings, 
if  they  neglect  its  business,  or  go  to  meetings  and 
simply  hold  up  their  hands  and  vote  like  machines, 
and  give  no  active  thought  to  its  business  through  the 
whole  course  of  the  year,  they  are  an  incumbrance, 
rather  than  a  help  to  it.  The  officers  and  directors 
should  have  evidence  of  the  never-lagging  interest  of 
the  membership.  This  will  not  only  put  a  proper 
check  upon  them  in  their  management  of  the  associa- 
tion's affairs,  but  it  will  also  spur  them  to  continued 
diligence  and  efficiency.  Any  officer  or  member  of  an 


104  MANUAL  FOR 

association  who  satisfies  himself  with  the  mere  per- 
functory discharge  of  the  routine  duties  of  his  position 
makes  a  serious  mistake.  His  active  and  intelligent 
participation  and  interest  in  the  association's  affairs 
at  all  times  are  necessary  to  its  highest  success. 

OFFICERS:  THEIR  ELECTION  AND  GENERAL  POWERS. 

As  stated  before  one  of  the  principal  functions  of 
the  corporate  meeting  is  the  election  of  officers.  This 
must  take  place  in  the  manner  and  at  the  time  re- 
quired by  the  constitution  and  by-laws.  If  these  pre- 
scribe no  particular  form  for  elections,  then  it  has 
been  held,  that  no  election  conducted  in  good  faith 
will  be  set  aside.  Some  associations  provide  by  con- 
stitutional rule  that  a  double  or  larger  number  of  can- 
didates for  each  office  shall  be  nominated,  from  whom 
the  members  are  to  elect ;  but  it  has  been  held,  in 
some  states,  that  a  member  receiving  a  majority  or 
plurality  of  votes,  as  the  case  may  be,  is  duly  elected 
and  entitled  to  hold  the  office,  even  if  his  name  is  not 
on  the  list  of  those  nominated.  When  candidates  are 
properly  nominated  and  the  election  is  held  in  due 
form  and  at  the  proper  time  and  place,  those  candi- 
dates receiving  a  majority  of  the  votes  cast  are  elected. 
This  is  true  even  though  the  majority  of  the  entire 
association  may  refrain  from  voting,  except  in  case 
the  constitution  makes  a  provision  to  the  contrary. 
If  from  any  cause  the  •  election  is  not  held  at  the 
proper  time  set  in  the  constitution,  the  association 
nevertheless  continues,  and  the  old  officers  are  in 
authority  until  their  successors  shall  be  duly  elected 
and  qualified.  The  casting  of  improper  votes  at  an 
election  does  not  vitiate  it  unless  it  can  be  shown  that 


BUILDING  ASSOCIATIONS.  105 

the  result  would  have  been  different  had  they  not 
been  received.  On  the  other  hand,  if  it  can  be  shown 
that  legal  votes  have  been  rejected  and  their  reception 
would  have  changed  the  result  of  the  election,  the 
election  is  vitiated  and  a  new  one  must  be  held. 
Ballots  containing  the  names  of  a  less  number  of 
directors  than  are  provided  for  must  be  received,  but 
those  containing  a  greater  number  must  be  rejected. 
An  inspector  or  judge  of  an  election  may  also  be  a 
candidate. 

The  acts  of  de  facto  officers  are  binding  upon  a  cor- 
poration, especially  so  far  as  these  acts  affect  third 
parties,  even  though  it  may  afterwards  be  decided  that 
the  officers  were  ineligible. 

The  management  of  the  affairs  of  an  association  is 
entrusted  so  entirely  to  its  board  of  officers  that  the 
greatest  care  should  be  exercised  to  select  only  proper 
persons  as  officers,  and  that  there  should  be  no  ques- 
tion as  to  their  regular  and  lawful  election. 


CHAPTER  X. 
ELECTION  AND   DUTIES  OF  OFFICERS. 


OFFICERS  REQUIRED. 

The  officers  of  a  building  association  are  the  same 
as  of  any  other  corporation  or  business  body.  They 
consist  usually  of  a  president,  a  vice-president,  a 
secretary,  assistant  secretaries,  a  treasurer,  an  attorney 
and  a  board  of  directors. 

ELECTIONS. 

The  constitution  provides  for  the  time,  place,  and 
manner  of  elections.  Since  the  officers  are  the  actual 
managers  of  the  business  of  the  association  the  pro- 
visions for  their  election  should  be  so  plain  and 
explicit  as  to  leave  no  room  for  doubtful  or  uncertain 
action.  The  officers  are  to  be  clothed  with  legal 
powers.  There  should  be  no  question  as  to  their 
legal  qualifications. 

Attention  has  been  called  already  to  the  necessity, 
in  the  organization  of  an  association,  of  selecting  for 
officers  those  persons  who,  by  character,  ability,  and 
experience,  are  best  qualified  to  serve  in  that  capacity. 
The  bearing  of  the  officers,  their  intelligence,  and 
their  business  ability  and  sagacity,  will  have  much 
to  do  with  an  association's  popularity  and  success. 

(106) 


MANUAL  FOR  BUILDING  ASSOCIATIONS.    107 

They  must  be  polite  to  all  the  members  and  other 
persons  visiting  the  headquarters  of  the  association 
or  calling  upon  them  privately ;  they  must  be  ready 
to  respond  intelligently  to  all  proper  inquiries  relating 
to  the  business  of  the  association ;  they  must  require 
that  all  moneys  in  which  the  association  is  interested 
are  properly  and  promptly  accounted  for ;  they  must 
be  quick  to  seize  upon  every  advantage  that  can  be 
used  to  further  the  interests  of  the  association ;  they 
must  carefully  guard  all  investments  or  loans  of  the 
association ;  and  must,  in  general,  be  as  watchful  and 
careful  of  all  matters  pertaining  to  the  association,  as 
any  successful  business  man  must  be  of  his  own  inter- 
ests and  business.  Officers  by  faithfulness  may  build 
up  an  association  and  make  it  very  strong,  while  by 
indifference  and  irregularity  of  proceedings,  they  may 
destroy  its  popularity  and  usefulness,  and  even  its 
existence. 

As  the  usual  elections  recur  year  after  year  the 
question  of  the  re-election  of  certain  persons  to  certain 
offices  will  arise.  There  is  one  rule  which  should 
always  prevail  at  elections,  and  that  is  to  seek  the 
greatest  good  for  the  association.  This  can  be  accom- 
plished in  two  ways:  by  the  re-election  of  faithful 
and  efficient  officers,  and  by  the  introduction  of  new 
blood,  new  energy,  and  new  influences  into  the  manage- 
ment. In  connection  with  the  re-election  of  officers 
it  should  be  borne  in  mind  that  no  one  member  should 
be  overburdened  with  the  work  of  an  association.  On 
the  other  hand  an  association  should  secure  the  benefit 
as  far  as  possible  of  the  knowledge  of  its  affairs  and 
workings  possessed  by  its  experienced  officers.  A 
good  rule  is  —  other  things  being  equal  —  to  re-elect 


io8  MANUAL  FOR 

the  salaried  officers  as  long  as  their  work  is  satisfac- 
tory and  no  special  reason  arises  for  making  a  change. 
Their  knowledge  of  the  details  of  the  business  is  very 
valuable.  It  is  best  to  re-elect  some  of  the  other 
officers,  especially  directors,  at  each  election.  It  is 
only  on  rare  occasions  where  there  is  to  be  some 
radical  change  in  the  management  of  an  association, 
that  an  entirely  new  board  of  directors  should  be 
chosen.  Where  there  is  no  necessity  for  making  a 
change,  it  is  best  to  re-elect  a  strong  representation 
from  the  old  board.  Indeed,  in  order  to  avoid  sudden 
and  unfortunate  changes  in  the  board  and  to  secure 
opportunity  at  the  same  time  for  desirable  rotation  in 
office,  some  associations  adopt  a  rule  to  the  effect  that 
at  the  first  election  one-third  of  the  directors  shall  be 
elected  for  a  one-year  term,  one-third  for  two  years, 
and  one-third  for  three  years.  Then  at  each  subse- 
quent election  one-third  of  the  whole  number  of  the 
board  are  chosen  for  the  full  three-year  term. 

DUTIES  OF  PRESIDENT  AND  VICE-PRESIDENT. 

In  general  terms  the  duties  of  the  president  and 
the  vice-president,  as  indeed  of  all  the  officers  of  an 
association,  are,  in  the  absence  of  special  provisions 
and  limitations,  the  same  as  belong  to  similar  officers 
in  other  like  bodies.  Thus,  unless  there  be  special 
provisions  to  the  contrary  in  the  constitution  or  by- 
laws of  an  association,  it  is  the  duty  of  the  president, 
or,  in  his  absence,  of  the  vice-president,  or  of  one  of 
the  vice-presidents  (who  act  in  their  numerical  order), 
to  call  meetings  of  the  association,  and  to  preside  and 
preserve  proper  order  at  the  same,  to  sign  the  con- 
tracts of  the  association,  and  to  execute  other  official 


BUILDING  ASSOCIATIONS.  109 

documents,  to  sign  warrants  drawn  upon  the  treasurer, 
to  keep  the  seal  of  the  association,  and,  with  the  board 
of  directors,  to  make  provisional  arrangements  to  meet 
all  the  various  unprovided  for  emergencies  and  neces- 
sities of  the  business  of  the  association.  The  president 
appoints  all  committees  for  the  appointment  of  which 
no  other  provision  is  made.  For  the  relief  of  the 
president  and  other  officers  from  uncertainty  and 
unnecessary  and  irksome  responsibility,  the  constitu- 
tion and  by-laws  should  specify  as  fully  and  clearly  as 
possible  the  duties  imposed  upon  each  of  them. 

DUTIES  OF  SECRETARY. 

The  office  of  secretary  is  in  many  respects  the  most 
important  in  the  association.  He  is  the  custodian 
of  its  business  and  records,  and  the  source  of  informa- 
tion concerning  its  affairs ;  he  keeps  the  minutes  of  all 
the  official  proceedings  of  the  association  and  its  board 
of  directors;  he  conducts  the  correspondence;  he 
keeps  the  financial  accounts ;  and  is,  in  general,  the 
agent,  and  to  a  large  extent,  the  acting  manager  of  the 
entire  business  of  the  association.  He  attests  the 
signature  of  the  president  on  all  the  official  documents. 

He  should  submit  quarterly,  semi-annual,  and 
annual  reports  to  the  association,  as  may  be  required 
by  the  rules.  These  reports  should  always  be  written 
out  plainly  and  neatly  ruled,  and  should  present  a  full 
account  and  summary  of  the  business  for  the  preceding 
term.  They  should  include  a  complete  balance  sheet, 
giving  a  detailed  exhibit  of  the  profit  and  loss  ac- 
counts, and  a  statement  of  all  assets  and  liabilities  of 
the  association.  Usually  the  directors  authorize  the 


no  MANUAL  FOR 

secretary  to  have  these  reports  printed  for  distribution 
among  the  members.* 

The  secretary  possesses  unusual  powers  and  carries 
heavy  responsibilities.  The  constitution  and  by-laws 
should  give  him  clear  and  specific  instructions  in 
regard  to  his  duties  and  liabilities.  No  mistake 
should  be  made  in  the  selection  of  the  secretary,  and 
when  once  chosen  he  should  have  the  cordial  support 
and  co-operation  of  all  the  shareholders. 

ASSISTANT  SECRETARIES. 

The  business  of  some  associations  is  so  large,  or 
the  secretary  is  so  occupied  with  other  business,  that 
the  employment  of  assistant  secretaries  is  necessary. 
They  are  usually  employed  by  the  directors.  Their 
duties  are  clerical,  and  they  work  under  the  direction 
of  the  secretary. 

DUTIES  OF  TREASURER. 

The  treasurer  is  the  custodian  of  the  association's 
funds.  Unlike  the  president  and  secretary,  he  posses- 
ses no  discretionary  powers.  His  duties  are  entirely 
ministerial.  He  must  give  his  receipt  for  all  money 
placed  in  his  hands,  and  is  responsible  for  all  the  funds 
of  the  association  he  thus  holds.  He  may  not  pay  out 
any  money  except  upon  warrants  drawn  in  due  form 
in  the  manner  provided  by  the  rules  of  the  association. 
He  must  keep  correct  accounts  of  all  receipts  and  pay- 
ments. He  is  not  liable  for  the  payment  of  warrants 
duly  drawn  by  the  proper  officers  of  the  association, 
even  though  the  money  is  wrongfully  applied  by  them. 

*  See  Chapter  on  Forms. 


BUILDING  ASSOCIATIONS.  in 

He  can  not  hold  the  association  responsible  for  money 
which  he  may  advance  for  legitimate  purposes  without 
a  warrant.  As  a  general  rule  the  treasurer  should  be 
allowed  to  make  his  own  selection  of  the  bank  or 
place  of  deposit  for  the  funds  of  the  association, 
unless  the  question  is  fixed  by  the  statutes.  If, 
however,  the  board  of  directors  select  the  place  of 
deposit,  he  is  not  liable  for  loss  of  the  association's 
funds  by  the  robbery  or  failure  of  the  bank  which  they 
have  selected.  When  the  treasurer  himself  selects  the 
bank  of  deposit  he  is  not  liable  for  loss  by  robbery  or 
failure,  provided  that  he  can  show  that  his  action  has 
been  free  from  fraud  or  negligence. 

DUTIES  OF  DIRECTORS. 

The  board  of  directors  are  the  responsible  man- 
agers of  the  association.  In  them  is  vested  the  power 
to  order  and  transact  all  business  for  the  association, 
and  their  acts  are  the  acts  of  the  association.  Their 
powers  and  limitations  must  be  defined  by  the  con- 
stitution and  by-laws.  If  they  fail  of  the  full  discharge 
of  their  duties  as  thus  defined,  they  are  responsible  to 
the  members  of  the  association.  If  on  the  other  hand 
they  transcend  these  powers  of  the  association,  they 
themselves  become  personally  liable  to  the  parties 
interested. 

It  may  be  said  in  general  terms  that  the  directors 
of  an  association  have  charge  of  the  disposition  of  the 
funds,  the  making  of  loans,  the  acceptance  of  securi- 
ties, the  filling  of  vacancies  in  the  offices,  and  the  pro- 
viding of  proper  compensation  for  services  when  this 
is  not  otherwise  fixed.  They  are  subject  to  the  con- 
trol of  the  corporate  meeting,  but  not  of  individual 


ii2  MANUAL  FOR 

members.  A  member  may,  however,  on  behalf  of 
himself  and  others,  proceed  by  law  against  the  direc- 
tors for  illegal  acts. 

The  number  of  meetings  of  the  board  of  directors 
is  usually  fixed  by  the  constitution,  but  the  time  and 
place  may  be  determined  by  the  directors  themselves. 
When  the  association  has  an  office  or  regular  place  of 
business,  it  is  best  that  the  directors'  meetings  be 
held  there.  The  time  of  the  regular  meetings  of  the 
directors  should  be  fixed  and  made  known  to  the 
members  of  the  association.  The  directors  may  call 
special  meetings,  both  of  the  members  in  general,  or  of 
their  own  body.  All  directors  must  have  notice  of  all 
meetings,  and  acts  of  meetings  irregularly  called  or 
convened  are  invalid,  except  so  far  as  the  interests  of 
a  third  and  innocent  party  may  suffer.  The  rules  of 
an  association  should  specify  carefully  what  number 
of  directors  shall  constitute  a  quorum  for  the  trans- 
action of  business.  Except  by  special  provision  a 
director  can  not  delegate  his  powers  to  another  person. 
But  the  full  board  may  delegate  some  portion  of  its 
work  to  a  committee  appointed  to  attend  to  it.  They 
should  keep  full  and  accurate  minutes  of  their  trans- 
actions. A  director,  as  an  individual,  may  make  a 
contract  with  the  association,  provided  he  secures  no 
special  advantage  not  common  to  other  members. 
A  director  becomes  personally  liable  to  the  stock- 
holders for  losses  when  they  are  occasioned  by  reason 
of  fraud  or  connivance  at  fraud  upon  the  association. 
Directors  are  liable  for  embezzlement,  willful  mis- 
conduct, breach  of  trust,  or  gross  inattention  and 
negligence.  They  are  not  liable  for  mistakes  of  judg- 
ment, however  absurd,  provided  they  are  honest  and 


BUILDING  ASSOCIATIONS.  113 

within  the  scope  of  their  powers  and  discretion.  A 
director  who  is  a  party  to  a  fraud  upon  an  association 
is  barred  from  sharing  in  its  benefits. 

DUTIES  OF  TRUSTEES. 

The  duty  of  trustees,  where  such  officers  are  ap- 
pointed, is  to  hold  and  convey  titles  for  the  association 
under  the  order  of  the  board  of  directors.  Very  few 
associations  now  have  trustees,  this  being  regarded  as 
useless,  unnecessary,  and  cumbersome. 

THE  ATTORNEY:     His  APPOINTMENT,   DUTIES,  AND  COM- 
PENSATION. 

Every  association  must  have  a  duly  authorized  legal 
adviser.  He  should  be  a  regular  officer  of  the  associa- 
tion. He  usually  is  designated  officially  as  attorney, 
though  he  is  sometimes  termed  solicitor,  or  coun- 
selor. The  manner  of  his  appointment  differs.  In 
some  associations  he  is  elected  at  the  same  time,  and 
in  the  same  manner,  and  for  the  same  term,  as  the 
other  officers.  But  more  frequently — and  this  seems 
much  the  better  way — he  is  selected  and  employed  by 
the  board  of  directors.  In  making  this  appointment 
the  directors  can  not  be  too  careful.  His  position  is 
one  in  which  he  may  do  great  good  or  harm  to  the 
association.  There  are  emergencies  in  which  the  wel- 
fare and  even  the  continued  existence  of  the  associa- 
tion will  depend  almost  entirely  upon  his  intelligence, 
honesty,  and  faithfulness.  He  should  be  a  man  of 
good  standing  in  his  profession.  He  should  have  a 
moderate  independent  practice,  not  so  much  as  to 
absorb  his  time  and  thought  to  the  exclusion  of  the 
care  of  the  affairs  of  the  association,  nor,  on  the  other 


ii4  MANUAL  FOR 

hand,  so  moderate  as  to  induce  him  to  undertake 
arbitrarily  to  make  business  out  of  the  association. 
Many  an  attorney,  who  has  the  real  interests  of  his 
association  at  heart,  is  the  most  active  and  efficient 
agent  in  securing  desirable  members  in  its  organiza- 
tion, and  in  so  increasing  its  list  of  shareholders  from 
time  to  time  as  to  put  it  upon  a  permanent  working 
basis.  The  attorney  should  be  a  man  of  such  character 
as  will  give  the  directors  some  degree  of  pride  in 
placing  his  name  upon  their  reports  and  documents. 
In  England  the  attorney  must  be  appointed  and  com- 
missioned under  the  official  seal  of  the  society. 

Whatever  may  be  the  method  of  his  appointment 
it  is  the  duty  of  the  attorney  to  act  as  the  legal  adviser 
of  the  association  upon  all  legal  matters  connected 
with  its  business.  He  advises  the  other  officers  and 
the  directors  in  regard  to  their  functions  and  duties 
and  the  proper  disposition  of  the  business  of  the  asso- 
ciation. He  examines  records  and  titles.  He  prepares 
or  passes  upon  the  forms  and  blanks  to  be  used  by  the 
association,  and  gives  his  advice  in  the  execution  of 
all  official  documents. 

The  following  article  from  The  Co-operative  News, 
of  Cincinnati,  written  by  Hiram  M.  Rulison,  Jr.,  an 
attorney  of  much  experience  in  building  association 
matters,  covers  this  whole  subject  so  well  that  it  is 
worth  incorporating  here.  Mr.  Rulison  says  : 

"After  the  appraising  committee  has  completed  its  work 
in  actually  inspecting  the  property  as  to  its  value,  it  is  then 
that  the  duty  and  responsibility  of  the  attorney  begins.  It 
really  should  begin  before  even  the  work  of  the  appraising 
committee  begins,  by  carefully  preparing  a  plat  showing  the 
exact  location  of  the  property  to  be  appraised,  so  that  no 
mistake  could  possibly  be  made  and  no  excuse  could  be 


BUILDING  ASSOCIATIONS.  115 

offered,  in  case  the  wrong  property  should  by  any  accident 
be  appraised  for  the  loan. 

In  one  or  two  cases  where  gross  frauds  were  attempted 
to  be  perpetrated,  this  was  the  excuse  offered  by  the  apprais- 
ing committee ;  that  they  had  appraised  the  wrong  propertj7. 
This  could  be  prevented  in  every  case  by  a  careful  preparation 
by  the  attorney  of  a  proper  plat.  Some  attorneys  think,  in 
order  to  retain  their  position  and  stand  well  with  the  board, 
that  all  they  are  called  upon  to  do  is  to  report  on  the  title  as 
they  find  it,  regardless  of  the  actual  value  of  the  property  or 
the  financial  standing  of  the  prospective  borrower.  No 
greater  mistake  could  possibly  be  made. 

An  honorable  attorney  will  report  all  the  facts  as  he  finds 
them,  and  if  he  does  not  do  so  he  is  violating  a  sacred  duty 
he  owes  to  the  hundreds  of  trusting  depositors,  who  are  rely- 
ing upon  his  honor  and  integrity  to  protect  their  hard-earned 
savings.  One  of  the  recent  failures  of  a  well  known  associa- 
tion could  have  been  avoided,  had  the  attorney  who  examined 
the  title  of  the  property  on  which  an  $8,000  loan  was  granted, 
been  honorable  enough  to  inform  the  board  that  the  property 
was  in  a  deep  gully  ;  that  it  was  taxed  at  only  a  few  hundred 
dollars,  and  had  only  recently  been  appraised  for  a  loan  in 
another  association  at  only  $1500. 

A  failure  to  disclose  facts  of  this  kind  is  nothing  but  down- 
right dishonesty,  and  would  lead  unsophisticated  people  to 
believe  that  such  an  attorney  was  'interested.'  About  the 
same  time,  a  prospective  loan  of  about  the  same  amount  was 
defeated  and  the  association  saved  by  the  brightness  and 
honesty  of  the  attorney,  who  boldly  reported  all  the  facts  to 
the  board  and  insisted  upon  a  full  examination  of  all  the  facts, 
which  disclosed  a  similar  state  of  affairs  as  first  referred  to. 
The  plunderers  were  exposed  and  the  depositors'  money 
saved. 

A  careful  attorney  would  report,  if  the  fact  came  to  his 
notice,  anything  of  an  unfavorable  nature  that  might  be  devel- 
oped in  regard  to  the  prospective  borrower ;  as  for  instance, 
that  all  the  other  property  which  the  party  owned  was  covered 
by  mortgage  to  its  full  value;  that  the  limit  was  being 
stretched  in  the  present  instance ;  that  other  loans  had  been 
foreclosed ;  that  the  present  loan  was  a  mere  shifting  around, 


u6  MANUAL  FOR 

'borrowing  from  Peter  to  pay  Paul,'  or  anything  else  that 
might  come  to  his  notice.  No  doubt  the  borrower  would 
denounce  such  an  attorney  for  being  a  meddlesome  man,  but 
the  directors  and  depositors  would  bless  him.  The  attorney 
should  always  report  the  tax  valuation  of  all  property  exam- 
ined ;  for  although  the  tax  value  is  scarcely  ever  a  fair  crite- 
rion to  measure  values  by,  still  it  is  in  most  cases  a  great  help. 
The  officers  of  the  board  and  the  appraising  committee  may 
be  the  most  careful  men  in  the  world,  and  may  perform  all 
their  duties  in  the  most  careful  manner  possible,  but  it  will 
amount  to  nothing  if  the  attorney  is  derelict  in  his  duties. 

He  can  not  make  too  careful  an  examination.  This  he 
sometimes  realizes  when  too  late,  especially  when  he  happens 
to  overlook  a  mortgage,  judgment,  or  a  mechanic's  lien,  and  is 
called  upon  to  make  the  amount  good,  as  sometimes  happens. 
If  so  much  care  is  required  of  an  'honest  attorney'  just  think 
how  completely  an  association  is  at  the  mercy  of  a  man  who 
is  careless  in  his  habits,  or  who  chooses  to  be  dishonest  and 
to  work  in  collusion  with  a  dishonest  borrower ;  he  could 
bankrupt  the  association  in  short  order  more  completely  than 
either  the  secretary  or  the  treasurer.  Only  men  of  honor, 
integrity,  ability,  and  experience,  should  be  entrusted  with  this 
great  responsibility.  Not  the  least  of  their  duties  is  that  of 
approving  the  sufficiency  of  the  sureties  on  the  bond  of  offi- 
cers. And  this  should  always  be  carefully  attended  to. 

I  have  even  thought  that  an  attorney  should  be  somewhat 
familiar  with  book-keeping,  and  that  he  should  be  willing  to 
serve  occasionally  on  an  auditing  committee  in  order  to  see 
that  this  branch  of  the  business  was  properly  attended  to.  In 
other  words  an  attorney  should  be  one  of  the  best  posted  men 
in  all  the  doings  and  workings  of  an  association,  including 
not  only  the  law  but  the  best  methods  of  management  and 
business,  and  should  be  willing  to  assist  in  any  and  every  way 
possible ;  for  if  any  one  person  more  than  another  receives  a 
benefit  from  the  association,  it  is  the  attorney. 

It  is  true  that  his  compensation  for  the  examination  of 
titles  is  small,  and  if  that  were  all  the  pay  he  received  he  could 
hardly  afford  to  do  the  work  for  the  money.  But  an  obliging 
and  accommodating  attorney  who  will  not  neglect  his  associa- 
tion, but  will  attend  the  meetings  with  some  degree  of  regu- 


BUILDING  ASSOCIATIONS.  117 

larity  and  be  on  hand  with  a  word  of  advice  when  most  needed, 
and  let  the  people  get  in  the  habit  of  meeting  him  on  these 
occasions  regularly,  will  find  a  steady  flow  of  business  from 
this  source  alone,  which  will  amply  repay  him  for  the  time 
and  labor  expended. 

More  associations  are  organized  by  attorneys  for  the  sake 
of  getting  the  business,  than  by  any  other  class  of  individuals ; 
and  yet,  strange  to  say,  the  attorney  is  usually  the  one  to  be 
the  first  to  lag  behind  when  there  is  any  work  to  be  done, 
unless  a  comfortable  fee  is  in  sight.  I  have  frequently  heard 
of  instances  where  the  attorney  failed  to  attend  the  weekly 
meetings  for  months  at  a  time.  These  attorneys  are  not 
enthusiastic  advocates  of  building  associations. 

On  the  other  hand  the  attorney  who  attends  regularly  finds 
his  hands  full  of  business,  keeps  his  association  out  of  useless 
litigation  by  a  little  timely  advice,  and  is  one  of  the  best 
friends  of  the  institution. 

Many  of  the  patrons  and  borrowers  are  working  people 
whose  time  is  not  their  own,  and  it  would  be  a  manifest  hard- 
ship on  them  to  compel  them  to  lose  a  day  to  dance  attend- 
ance on  an  attorney's  convenience,  when  with  a  little  effort 
on  his  part  he  could  have  the  necessary  papers  signed  at  the 
association  and  thus  oblige  a  client,  as  well  as  save  him 
a  day's  wages. 

I  do  not  say  this  could  always  be  done,  but  sometimes  it 
certainly  can  be,  especially  where  there  are  a  large  number  of 
mechanics  who  are  compelled  to  sign  a  release  of  any  claim 
on  a  building  before  they  can  draw  pay  for  labor  or  materials. 
It  would  be  a  hardship  to  compel  six  or  eight  men  to  lose  a 
day  to  come  to  a  lawyer's  office  when  all  the  business  could  be 
done  at  the  association  without  loss  of  time.  A  building  asso- 
ciation is  certainly  a  co-operative  institution,  and  every  one 
connected  with  it  should  be  willing  to  do  his  part  and  his 
duty.  On  the  other  hand  directors  and  other  members  should 
not  expect,  (as  is  too  often  the  case)  that  the  attorney  is  bound 
to  attend  to  their  private  business  at  building  association 
reduced  rates.  It  is  true  he  may  be  able  to  cut  ra.tes  some  on 
the  score  of  friendship  and  old  acquaintance,  and  this  he 
undoubtedly  will  and  does  do,  but  an  attorney  would  have  to 
be  a  person  of  herculean  capacity  for  work,  to  be  able  to  make 


Ii8  MANUAL  FOR 

both  ends  meet  and  pay  expenses,  if  all  his  work  were  done 
at  these  rates.  This,  however,  is  a  fact  that  is  not  always  takeii 
into  consideration  by  members,  and  sometimes  is  productive 
of  hard  feelings,  if  the  attorney  will  not,  or  can  not,  consent 
to  work  for  all  his  friends  at  cut  rates.  The  association  too 
frequently  criticises  an  attorney's  bill  for  foreclosing  a  mort- 
gage, looking  upon  this  expenditure  as  a  dead  loss,  yet  it  is 
one  of  the  most  important,  and  sometimes  one  of  the  most 
difficult  of  an  attorney's  duties,  and  sufficient  compensation 
should  be  allowed  to  insure  careful  and  correct  work  on  the 
part  of  the  attorney. 

All  questions  have  two  sides,  and  while  an  attorney  should 
be  able  and  willing  to  do  his  duty  thoroughly  and  conscien- 
tiously, he  should  at  the  same  time  receive  such  treatment 
from  the  association  and  its  membership,  as  will  at  least 
assure  him  that  they  appreciate  the  interest  he  may  take  in 
their  welfare,  and  that  they  believe  that  the  '  laborer  is  worthy 
of  his  hire.'" 

If  the  attorney  does  not  receive  a  stated  salary,  the 
directors  should  fix  a  system  of  fees  to  be  paid  him 
for  the  examination  of  titles  and  other  services. 
Some  associations  have  a  graded  system  of  fees  for 
the  examination  of  titles.  If  a  member  borrows  one 
share,  he  is  taxed  a  certain  amount  for  the  examination 
of  his  title  to  the  property  he  mortgages.  If  he  bor- 
rows more  than  one  share,  he  is  taxed  a  proportionate 
amount  for  each  additional  share.  This  rule  is  mani- 
festly unjust  to  attorneys,  for  it  requires  as  much  time 
and  work  to  make  an  examination  of  a  title  if  but  a 
single  share  is  borrowed  on  it,  as  if  it  were  security 
for  ten  or  twenty  shares.  Since  the  examination  of 
titles  requires  care  and  involves  responsibility,  an 
attorney  should  have  a  good,  reasonable  fee. 

For  instituting  and  defending  suits,  and  any  other 
unusual  legal  business,  special  fees  should  be  fixed 
by  the  directors. 


BUILDING  ASSOCIATIONS.  119 

BONDS  OF  OFFICERS. 

It  is  customary  to  require  bonds  from  certain 
officers  of  associations.  Where  the  statutes  give  no 
direction  in  this  matter  it  should  be  fixed  by  the  asso- 
ciation itself  in  its  constitution  and  by-laws.  The 
particular  object  of  a  bond  is,  to  enforce  respons- 
ibility, especially  with  those  officers  who  have  the 
handling  and  custody  of  the  funds,  or  of  any  officer 
whose  trust  exposes  him  to  temptation  and  the  asso- 
ciation to  the  possibility  of  loss.  The  by-laws  or 
rules  should  specify  which  officers  shall  give  bond  and 
the  amount  of  bond  required  in  each  case.  The  ap- 
proval of  bonds  usually  rests  with  the  directors.  A 
bondsman  is  liable  only  to  the  extent  of  the  precise 
terms  of  the  bond.  All  officers  who  are  required  to 
give  bond  should  have  them  ready  at  the  first  meet- 
ing after  their  election  and  hand  them  in  at  that  time. 
Bonds  should  be  carefully  drawn  so  as  to  meet  all 
legal  requirements.  Each  officer  who  is  to  give  bond 
should  furnish  at'  least  two  first-class  sureties. 

The  president  should  give  a  bond  of  from  $2,000 
to  $4,000;  the  vice-president,  $2,000  to  $4,000;  the 
secretary,  $2,000  to  $5,000;  the  assistant  secretary, 
$500  to  $1,000;  the  treasurer,  $5,000  to  $10,000; 
members  of  appraising  committee,  $1,000  to  $3,000, 
each;  the  attorney,  $5,000  to  $10,000.  Members  of 
special  committees  should  also  in  some  cases  give 
bond  with  amounts  in  proportion  to  the  duties  and 
responsibilities  devolving  upon  them. 

RESPONSIBILITIES  OF  OFFICERS. 

No  person  should  be  selected  as  an  officer  of  a 
building  association  who  is,  from  any  cause,  disquali- 


120  MANUAL  FOR 

fied  for  a  faithful  discharge  of  the  functions  of  his 
office.  Whoever  accepts  a  position  as  an  officer 
should  faithfully  and  conscientiously  discharge  the 
duties  imposed  upon  him.  Hence,  by  agreement 
among  the  members  of  an  association,  certain  provi- 
sions are  usually  made  in  the  constitution  or  by-laws 
for  the  punishment  of  such  lapses  from  duty  on  the 
part  of  officers  as  are  not  of  a  criminal  character. 
Thus  it  is  often  provided  that  the  officers  shall  be 
subject  to  fines  for  certain  classes  of  offenses  or  to 
removal  for  certain  other  offenses.  The  rules  may  be 
so  drawn  as  to  apply  to  cases  where  the  offense  is  not 
directly  against  the  interests  of  the  association  or  its 
members,  but  may  simply  affect  the  moral  character 
of  the  officer  and  his  standing  in  the  community,  thus 
rendering  him  unpopular  and  unfit  for  his  position  of 
trust  in  the  association.  An  officer  who  becomes  de- 
linquent in  his  position  as  a  member  of  the  associa- 
tion, may  be  considered  as  unfit  to  occupy  a  place  as 
an  officer.  The  power  of  fixing  penalties,  such  as 
fines  or  removal  from  office,  may  be  fixed  in  the  board 
of  directors,  or  may  rest  in  the  association  at  large. 
The  criminal  liability  of  officers  of  a  building  asso- 
ciation is  the  same  as  that  of  officers  of  other  cor- 
porations or  of  individuals  generally.  No  man, 
whatever  his  position,  is  permitted  to  appropriate  to 
his  individual  use  or  advantage  that  which  is  not  his 
own  or  to  which  he  has  not  obtained  a  legal  right. 

REMUNERATION  OF  OFFICERS. 

What  officers  shall  receive  compensation  is  deter- 
mined by  the  provisions  of  the  constitution  and  by- 
laws. It  is  the  general  custom  to  leave  the  amount 


BUILDING  ASSOCIATIONS.  121 

of  compensation  to  be  paid  to  the  different  officers  to 
the  discretion  of  the  directors  who  fix  the  amount  by 
special  contract  with  the  respective  officers.  When 
the  salary  is  fixed  by  the  constitution  or  by-laws  the 
officer  may  claim  the  full  amount  upon  the  strength 
of  that  record  alone.  If  his  duties  become  enlarged, 
and  the  salary  is  then  inadequate  he  can  not  claim 
additional  compensation.  His  only  remedy  lies  in 
securing  a  change  in  the  rules  or  in  resigning  his 
position.  In  cases  where  compensation  is  not  fixed 
by  the  constitution  or  by-laws,  and  where  no  express 
contract  has  been  entered  into,  it  rests  in  the  discre- 
tion of  the  board  of  directors  as  to  whether  any  com- 
pensation shall  be  allowed  or  not,  and  to  what 
amount.  It  should  be  borne  in  mind  that  a  building 
association  is  an  organization  for  the  mutual  advant- 
age of  its  members,  and  the  fundamental  idea  is  that 
each  member  shall  work  for  the  benefit  of  all.  On 
this  account  it  is  expected  that  each  member  hold 
himself  ready  to  contribute  his  personal  services 
within  reasonable  limits.  Therefore,  even  those  who 
are  in  official  position  are  expected  to  render  a  fair 
proportion  of  service  without  remuneration  and  that 
they  are  to  be  compensated  only  when  it  would  be 
unjust  to  them  as  individuals  to  expect  their  services 
without  remuneration. 

A  salaried  officer  can  not  claim  extra  compensa- 
tion for  work  done  in  the  line  of  his  duty.  Officers 
must  look  only  to  the  funds  of  the  association  for 
their  remuneration,  and  can  not  recover  the  amount 
of  their  salaries  from  individual  members  or  directors. 


122  MANUAL  FOR 

SALARY  OF  DIRECTORS. 

It  has  been  almost  the  universal  custom  that  di- 
rectors should  serve  without  remuneration.  Lately 
the  question  of  allowing  them  pay  for  their  services  is 
being  seriously  considered.  Indeed,  in  some  associa- 
tions directors  are  paid  for  their  services  either  directly 
or  indirectly.  Some  of  the  considerations  urged  in  favor 
of  the  payment  of  directors  may  be  mentioned.  Their 
services  are  indispensable  to  the  operations  of  an  asso- 
ciation. It  is  wholly  impracticable  for  all  the  mem- 
bers of  an  association  to  come  together  at  each  meet- 
ing and  attend  to  the  receiving  of  money  and  all  its 
routine  business  operations.  Even  if  they  could  so 
come  together,  it  would  be  impracticable  for  such  a 
body  of  people  to  do  such  work.  Many  of  them  do 
not  know  how  to  do  it,  and  so  many  coming  together 
they  would  simply  be  in  one  another's  way.  "  What 
is  everybody's  business  is  nobody's  business." 

On  account  of  these  circumstances  associations  are 
compelled  to  delegate  authority  to  certain  selected 
members  to  attend  to  the  prosecution  of  their  busi- 
ness. These  selected  members  are  called  directors. 
Because  certain  stockholders  are  selected  to  serve  in 
the  capacity  of  directors  does  not  make  it  any  more 
possible  or  convenient  for  them  to  attend  the  weekly 
meetings  to  look  after  the  business  than  it  would  be  for 
any  other  stockholder  not  so  selected.  They  must  lose 
their  time  and  comfort,  and  thus  interfere  to  a  greater 
or  less  extent  with  the  prosecution  of  their  own  pri- 
vate business  and  interests.  Again,  those  stockholders 
selected  to  act  as  directors  are  so  selected  because  they 
have  that  intelligence  and  knowledge  that  fit  them  to 
attend  to  such  business.  Intelligence,  knowledge,  and 


BUILDING  ASSOCIATIONS.  123 

experience  are  valuable.  Hence,  other  things  being 
equal,  a  director's  time  is  likely  to  be  of  even  more 
value  than  that  of  the  average  stockholder. 

The  directors  being  charged  with  the  actual  man- 
agement and  disposition  of  the  business  of  the  associa- 
tion, they  must  carry  a  responsibility  unknown  to 
the  other  stockholders.  The  directors  are  the  official 
representatives  of  an  association.  As  such  they  must 
not  only  execute  its  routine  business  but  must  repre- 
sent it  in  all  incidental  matters  and  in  emergencies. 
They  are  the  sources  of  information  to  the  stockhold- 
ers and  to  outsiders.  Their  work  on  committees  in- 
volves them  in  many  duties  outside  of  the  regular 
meetings.  They  must  account  faithfully  for  all 
moneys  coming  into  the  possession  of  the  association ; 
they  must  keep  up  the  collections  and  act  promptly 
in  case  of  delinquents ;  they  must  make  deposits  and 
investments;  they  must  decide  upon  and  declare 
dividends ;  they  must  pass  upon  premium  and  inter- 
est rates ;  they  must  accept  or  reject  borrowers  and 
mortgages  and  other  securities;  they  are  compelled  to 
keep  full  records  of  all  their  doings  in  the  minute  and 
account-books.  That  every  matter  shall  have  due 
attention  they  are  compelled  to  bind  themselves  to  a 
certain  order  and  routine  in  what  they  do.  Finally, 
they  are  required  to  keep  their  members  informed 
officially  by  regular  reports  of  all  their  transactions, 
and  of  the  condition  of  the  affairs  of  the  association  in 
full  detail. 

Many  members  of  associations,  not  having  had  ex- 
perience as  directors,  and  not  being  close  observers  or 
very  thoughtful  about  the  matter,  do  not  appreciate 
the  amount  and  quality  of  service  required.  Indeed, 


124  MANUAL  FOR 

some  are  inclined  to  look  upon  the  position  as  a 
sinecure,  a  place  of  honor,  and  to  be  sought  after  on 
that  account. 

Although  directors  are  put  to  all  the  inconvenience 
and  labor  indicated  above,  they  have  no  more  share  in 
the  benefits  arising  therefrom  than  have  the  other 
stockholders.  It  is  argued  that  an  association  is  a 
business  enterprise.  The  men  and  women  who  com- 
pose the  membership  of  the  association  do  not  work 
for  their  own  employers  except  for  wages.  They  do 
not  give  their  own  services  without  pay.  On  the  other 
hand  they  are  the  employers  of  the  directors  of  their 
associations.  Should  they  require  their  own  employes 
to  serve  without  pay  ? 

But  if  directors  are  to  be  paid  it  must  be  decided 
how  much,  and  upon  what  basis.  This  is  answered  in 
a  general  way  by  saying  that  it  must  be  only  for  ser- 
vices actually  rendered.  In  the  operations  of  an  as- 
sociation each  officer,  each  director,  has  an  assignment 
of  actual  duties  to  perform,  and  if  paid  at  all  he  should 
be  paid  in  proportion  to  the  amount,  the  character, 
and  the  responsibility  of  his  work.  In  certain  private 
corporations  it  has  become  the  custom  to  pay  each 
director  a  certain  stated  sum  for  each  meeting  he  at- 
tends. When  absent  from  a  meeting  he  receives  no 
pay.  It  is  argued  that  the  introduction  of  this  system 
into  the  operations  of  a  building  association  would  have 
a  good  effect  in  two  ways.  First,  it  would  secure  the 
regular  attendance  of  directors;  second,  it  would 
secure  better  service  from  directors ;  for,  by  regular 
attendance  upon  the  meetings  and  participation  in  the 
business,  each  director  will  have  a  better  understand- 
ing of  all  the  plans  and  details,  and  hence,  his  services 
will  be  more  valuable. 


BUILDING  ASSOCIATIONS.  125 

There  are  three  things  to  consider  in  fixing  the 
amount  of  remuneration,  if  it  should  be  decided  that 
directors  shall  be  paid.  The  pay  must  be  somewhat  in 
proportion  to  the  number  of  meetings,  the  amount  of 
business  transacted,  and  the  number  of  directors. 
Three  propositions  have  been  made  in  this  connection  : 
(ij  That  each  director  be  paid  a  stated  sum  for  each 
meeting  he  attends  ;  (2)  That  the  directors  be  paid  a 
certain  per  cent,  upon  the  amount  of  business  trans- 
acted ;  (3)  That  each  director  be  paid  a  stated  salary 
per  year  or  per  term  of  service.  This  opens  up  a  large 
field  for  discussion  which  it  would  be  inappropriate  to 
attempt  to  occupy  here.  This  one  practical  suggestion 
may  be  made,  to  wit : — Let  the  number  of  directors  be 
adapted  to  the  actual  needs  in  the  transaction  of  the 
business  of  the  association  just  as  in  an}'  other  business 
enterprise.  Let  the  number  of  meetings  also  be  ad- 
justed so  as  best  to  meet  the  requirements  of  the 
association.  Then  upon  some  basis  let  the  directors 
be  paid  for  actual  services  rendered.  It  will  certainly 
happen  that  the  agitation  of  this  question  will  lead  to 
the  introduction  of  better  business  methods  in  the 
management  of  associations,  and  it  may  tend  to  lessen 
their  number,  to  concentrate  the  business  into  fewer 
hands,  to  fix  responsibility  more  closely,  and  possibly 
to  the  establishment  of  regular  offices  open  during  all 
business  hours  as  well  as  on  certain  evenings  for  the 
transaction  of  business,  the  same  as  in  banks  or 
private  corporations,  and  already  in  existence  in  some 
building  associations. 

SALARY  OF  SECRETARY. 

What  is  said  above  does  not  apply  to  the  salary  of 
the  secretary.  The  salary  of  this  officer  should  not 


126    MANUAL  FOR  BUILDING  ASSOCIATIONS. 

be  based  upon  the  work  done  in  the  meetings.  His 
duties,  even  in  this  respect,  are  very  exacting.  He 
must  attend  all  meetings,  keep  the  accounts  of  re- 
ceipts and  disbursements,  and  also  the  minutes  of  the 
proceedings.  But  much  the  greater  portion  of  his 
work  is  outside  of  the  meetings,  in  posting  his  books, 
calculating  dividends,  and  attending  to  the  innumer- 
able details  connected  with  his  office.  It  is  very 
essential  that  a  secretary  should  be  competent  and 
faithful,  and  such  a  secretary  should  be  liberally  paid 
for  his  work.  Few  secretaries  receive  sufficient  pay. 


CHAPTER   XII. 


POWERS  AND  ^lABILITIES, 


GENERAL  POWERS. 

A  building  association,  being  in  the  nature  of  a 
joint-stock  corporation,  possesses  the  general  powers 
belonging  to  corporations  of  that  class.  These  are 
usually  laid  down  in  the  statutes  of  the  different  states 
about  as  follows : 

1 .  To  have  perpetual  succession ; 

2.  To  have  a  corporate  seal ; 

3.  To  make  contracts  and  to  hold  real  estate  in  a 
corporate  capacity ; 

4.  To  sue  and  to  be  sued ;  and 

5.  To  make  rules  for  their  own  government. 

An  association  may  not  go  beyond  its  statutory 
limitations  and  privileges  and  assume  functions  and 
prerogatives  not  granted  in  its  charter.  Such  action 
would  jeopardize  the  continuance  of  the  charter  itself 
and  tend  to  render  all  acts  of  the  association  invalid. 

PERPETUAL  SUCCESSION. 

The  right  of  perpetual  succession  is  essential  to 
the  purpose  of  the  association,  for,  though  the  member- 
ship and  the  officers  of  the  association  may  be  changed 

(127) 


128  MANUAL  FOR 

more  or  less  from  time  to  time,  the  association  itself 
must  maintain  an  organic  existence  until  it  has  com- 
pleted its  course.  Otherwise  it  would  be  impossible 
for  such  an  organization  to  carry  out  its  mission. 
While  the  association  exists,  it  remains  in  the  eye  of 
the  law  an  entity,  notwithstanding  any  changes  that 
may  take  place  from  time  to  time  in  its  elements. 

THE  CORPORATE  SEAL. 

The  seal  of  an  association  is  the  official  stamp  by 
which  the  papers  executed  as  a  part  of  its  official  busi- 
ness are  to  be  identified  and  verified.  The  seal  must 
be  in  the  form  of  a  stamp  which  will  make  an  im- 
pression into  wax  or  paper.  Its  custody  and  the 
manner  of  its  use  should  be  prescribed  in  the  rules  of 
the  association.  The  affixing  of  the  seal  to  an  instru- 
ment should  be  accompanied  by  the  official  signatures 
of  the  president  and  the  secretary.  Some  associations 
require  the  signature  of  other  officers  also.  There  has 
been  much  litigation  in  reference  to  the  use  of  corpor- 
ate seals,  and  the  rule  has  been  established  that 
"Wherever  the  law  requires  a  natural  person  to  attach 
a  seal  to  the  instrument  executed  by  him,  in  like  cases 
only  would  it  be  necessary  for  the  corporation  to  ex- 
ecute a  like  instrument  by  a  corporate  seal."  The 
mistake  should  not  be  made  that  an  association  is  not 
liable  for  contracts  that  are  not  verified  by  its  seal. 
On  the  contrary  it  is  liable  for  all  undertakings  that 
are  expressed  or  implied  by  its  acts. 

It  must  not  be  understood  that  every  association 
is  required  to  possess  a  seal.  The  possession  of  a  seal 
is  essential  only  when  required  by  the  statutes  or  the 


BUILDING  ASSOCIATIONS.  129 

constitution  of  the  association.  As  a  matter  of  fact  a 
large  proportion  of  the  associations  in  operation  do 
not  use  seals. 

CONTRACTS  AND  AGENTS. 

An  association  may  make  contracts  and  purchases 
and  sales  directly  through  its  corporate  meeting.  But, 
like  other  corporations,  it  usually  acts  through  officers 
and  agents,  as  heretofore  explained  in  the  discussion 
of  the  duties  of  officers.  It  is  necessary  that  the  rules 
provide  fully  for  the  proper  execution  of  all  contracts, 
that  they  designate  the  manner  in  which  they  are  to 
be  made,  and  the  officers  who  are  empowered  to  act 
for  the  association.  When  officers  are  once  appointed 
with  power  to  make  contracts  then  the  general  laws 
relating  to  the  subject  of  agency  apply  to  associations, 
their  agents,  and  third  parties.  Concerning  appoint- 
ments of  agents,  it  has  been  held  that  an  agent  may- 
act  without  written  authority,  or  any  authentication 
by  the  corporate  seal  of  an  association  if  a  seal  is  used, 
provided  his  appointment  is  regular  in  other  respects ; 
that  any  person,  even  a  minor,  may  by  due  appoint- 
ment become  an  agent  of  an  association  ;  and  that,  in 
certain  cases,  a  member  of  an  association  as  its  agent 
may  deal  with  himself  or  with  himself  as  the  agent  of 
a  third  party,  provided  no  special  advantage  is  secured 
on  either  side  through  the  arrangement. 

Since  the  appointment  of  the  officers  of  an  associa- 
tion is  a  matter  of  public  record,  third  parties  in  deal- 
ing with  them  must  satisfy  themselves  of  their 
authority  to  act  as  agents.  So  long  as  agents  of 
associations  act  within  the  limits  of  the  authority  con- 
ferred upon  them  the  association  is  bound  by  their 


i3o  MANUAL  FOR 

acts.  If  an  agent  makes  contracts  in  excess  of  his 
authority^  they  may  afterwards  be  ratified  and  ac- 
cepted by  the  association  or  its  board  of  directors.  In 
order  to  make  his  contracts  in  due  form  and  binding, 
an  agent  must  specify  in  the  papers  which  he  executes 
that  the  writing  is  done  by  the  hand  of  an  agent. 
Notice  properly  served  upon  an  agent  is  a  notice  to 
the  principal  in  the  transactions  for  which  he  is 
employed.  A  notice  conveyed  through  one  director 
to  the  board  at  a  regular  meeting  is  a  notice  to  the 
association.  Or  a  notice  conveyed  to  any  director 
while  engaged  in  the  business  of  the  association  is  a 
notice  to  the  association,  but  is  not  a  legal  notice  if 
given  to  him  when  he  is  not  so  engaged.  A  notice 
published  in  a  newspaper  is  not  a  legal  notice  unless 
it  relate  to  matters  required  to  be  so  published. 
Private  knowledge  on  the  part  of  a  director  or  officer, 
obtained  from  rumor  or  in  any  other  accidental  way, 
can  not  be  regarded  as  an  official  notice  to  the  associ- 
ation. A  new  board  of  directors  is  presumed  to  know 
all  the  facts  and  circumstances  known  by  or  com- 
municated to  the  previous  board.  An  officer  or  agent 
of  an  association  can  not  delegate  his  authority  to 
another  person,  except  where  some  special  provision 
is  made  to  that  end. 

SUITS. 

As  a  necessary  result  of  its  power  to  make  con- 
tracts an  association  has  the  right  to  enforce  such 
contracts  by  suit  if  necessary.  On  the  other  hand,  as 
a  party  to  these  contracts,  the  association  itself  is 
liable  to  legal  process  for  the  violation  of  any  of  its 
obligations.  An  association  may  bring  suit  against 


BUILDING  ASSOCIATIONS.  131 

individuals  or  corporations  to  enforce  its  legal  and 
equitable  rights ;  and  may  in  like  manner  bring  suit 
against  its  own  delinquent  officers  and  members.  On 
the  other  hand  it  is  liable  to  be  sued  by  outsiders  or 
by  its  own  officers  and  members  for  any  actionable 
neglect  or  delinquency  on  its  own  part. 

No  general  rule  can  be  given  for  the  issuing  of 
processes  for  and  against  building  associations,  since 
the  requirements  vary  under  the  laws  of  the  different 
states.  These  legal  requirements  must  of  course  in 
all  such  cases  be  carefully  observed.  Such  matters 
should  be  attended  to  by  the  attorneys  of  associations. 
To  enter  upon  a  general  specification  and  discussion 
of  the  grounds  upon  which  suits  may  be  brought  by 
or  against  associations  would  be  an  undertaking  too 
elaborate  for  and  foreign  to  the  purpose  of  this  work. 
These  matters  are  well  defined  under  the  general  and 
special  legislation  of  the  different  states. 

RULES. 

• 

Two  general  principles  may  be  laid  down  concern- 
ing the  adoption  of  rules  for  the  government  of  an 
association.  The  first  is  that  the  rules  must  conform 
to  the  constitution  and  laws  of  the  United  States, 
and  also  of  the  state  in  which  the  association  exists. 
And  the  second  is  that  they  must  conform  to  the  pur- 
poses for  which  the  association  is  organized.  Forms 
for  constitution  and  by-laws  are  printed  in  the  ap- 
pendix. 

SPECIAL  POWERS. 

Associations,  as  a  rule,  in  the  different  states  are 
clothed  with  certain  special  powers.  What  these 


132  MANUAL  FOR 

powers  may  be  for  any  particular  association  in  any 
particular  state  must  be  learned  from  an  examination 
of  the  statutes  in  that  particular  state  and  of  the 
charter  of  that  particular  association.  When  the 
statutes  are  silent  upon  any  particular  power,  neither 
permitting  nor  prohibiting  it,  or  if  doubt  exists,  the 
legal  rights  of  an  association  in  the  premises  may  be 
determined  by  application  to  the  attorney  general,  or 
by  bringing  action  before  the  courts.  Among  the 
special  powers  which  an  association  may  or  may  not 
possess  under  the  statutes  and  its  charter,  or  indepen- 
dent of  these,  are  the  rights  to  borrow  money,  to  ac- 
quire and  to  hold  real  estate,  to  build  houses,  etc. 
But  some  special  powers  are  conferred  upon  asso- 
ciations generally,  such  as  the  authority  to  impose 
and  collect  fines.  To  determine  the  special  powers 
of  any  association  is  a  matter  for  legal  inquiry,  and 
in  all  cases  should  be  referred  to  the  proper  legal 
authorities. 

DISSOLUTION. 

In  the  case  of  a  terminating  association  it  becomes 
dissolved  as  a  matter  of  course  at  the  expiration  of 
the  time  for  which  it  was  incorporated  and  its  charter 
granted,  or  when  its  stock  matures.  In  some  states 
the  period  of  existence  is  fixed  by  the  statutes.  If 
the  members  of  an  association,  or  an  essential  portion 
of  them  should  die,  it  would  terminate  its  existence. 
If  at  any  time  the  assets  of  an  association  become 
equal  to  the  par  value  of  all  its  stock  it  ceases  to  ex- 
ist, except  so  far  as  winding  up  its  affairs  is  concerned. 
The  members  may,  by  unanimous  agreement,  sur- 
render the  charter  of  an  association  and  its  franchises. 


BUILDING  ASSOCIATIONS.  133 

It  has  been  held  that,  where  there  is  no  express  pro- 
vision on  the  subject,  a  majority  of  the  members  may, 
by  resolution,  surrender  the  charter  and  dissolve  the 
association.  But  they  can  not  do  this  against  the 
resistance  of  the  minority.  An  association  is  *  not 
dissolved  by  mere  neglect  or  indifference  on  the  part 
of  the  members  which  leads  them  to  fail  in  the  dis- 
charge of  their  duties. 

The  insolvency  of  an  association,  or  the  refusal  of 
members  to  keep  up  their  stock-payments,  or  the 
omission  to  elect  officers,  does  not  work  a  dissolution 
of  the  association.  Associations  may  be  dissolved  by 
act  of  the  legislature  or  decree  of  court,  where  such 
dissolution  does  not  impair  the  obligation  of  con- 
tracts. Such  dissolution  is  usually  brought  about  by 
the  state  itself,  caused  by  the  non-use  or  the  mis-use  of 
the  franchises  of  the  association.  In  all  cases  when 
the  grant  of  the  charter  is  found  to  have  been  defec- 
tive in  any  material  part,  or  when  it  has  been  granted 
to  persons  imperfectly  qualified  to  receive  it,  or  upon 
improper  representations,  it  is  competent  for  the  state 
to  rescind  its  action  and  to  dissolve  the  association. 
In  case  of  the  mismanagement  of  the  affairs  of  an 
association,  or  where  the  system  of  operation  is  such 
as  to  involve  losses,  the  courts  may,  upon  proper  ap- 
plication, appoint  a  receiver  to  take  charge  of  its 
affairs  and,  if  necessary,  to  wind  it  up.  In  the  dis- 
solution of  an  association,  or  the  winding  up  of  its 
affairs,  many  questions  of  equity  and  of  law  are  in- 
volved, which  must  be  anticipated  in  the  rules,  or  be 
submitted  at  the  time  of  dissolution  to  proper  judicial 
or  legal  authority. 


CHAPTER  XIII. 


PRACTICAL  QUESTIONS  ANSWERED. 


EXPLANATORY  NOTE. — There  are  numerous  questions 
which  continually  arise  in  reference  to  the  practical  workings 
of  associations  which  require  specific  answers.  A  number 
of  the  more  important  of  these  are  grouped  together  and 
answered  in  this  chapter.  In  this  same  connection  various 
practical  suggestions  are  made  which  will  be  found  of  value 
in  the  transaction  of  the  actual  business  of  associations. 

BORROWING  MONEY. 

Who  may  borrow?  It  is  generally  understood  that 
none  but  members  may  borrow  money  from  an  asso- 
ciation. This  is  true,  but  it  sometimes  leads  to  a 
misunderstanding.  While  it  is  a  fact  that  only  mem- 
bers may  borrow,  it  is  also  true  that  any  person  may 
become  a  member  at  any  time  with  but  trifling  cost, 
and  may  immediately  become  a  borrower.  The  con- 
stitution and  by-laws  of  an  association  contain  the 
terms  and  conditions  upon  which  its  money,  is  loaned, 
and  are,  in  a  sense,  a  portion  of  the  contract  or  agree- 
ment between  the  borrower  and  the  association. 
Hence  the  necessity  of  every  borrower  becoming  a 
member  and  affixing  his  signature  to  the  constitution 
and  by-laws.  With  this  understanding  of  the  matter, 

(i34) 


MANUAL  FOR  BUILDING  ASSOCIATIONS.    135 

the  answer  may  be  given  that  anybody  may  borrow 
money  from  an  association. 

For  what  purpose  may  money  be  borrowed?  As  in- 
dicated in  a  previous  chapter,*  many  persons  suppose 
that  money  can  not  be  borrowed  from  a  building  asso- 
ciation except  for  building  purposes.  As  there  ex- 
plained, an  association  has  nothing  to  do  with  the 
purpose  for  which  money  is  borrowed.  The  sole  duty 
of  the  association  is  to  see  that,  in  making  the  loan,  it 
is  protected  by  ample  security.  A  member  therefore 
may  borrow  money  for  any  purpose  whatever. 

What  amount  may  be  borrowed^  The  financial 
transactions  of  an  association  with  its  members  are 
always  based  upon  shares.  Shares  are  for  different 
amounts,  and  members  are  allowed  to  own  different 
numbers  of  shares  in  different  associations.  But  the 
question  may  be  answered  in  a  general  way  by  saying 
that  a  member  may  borrow  the  full  amount  of  the 
paid-up  value  of  the  shares  he  holds,  or  any  part 
thereof,  provided  the  security  he  offers  is  satisfactory. 
Thus,  if  the  shares  of  an  association  are  $500  each, 
and  a  member  is  a  subscriber  for  three  shares,  he  may 
borrow  $1,500  or  any  part  thereof.  But  in  order  to 
avoid  complications  in  accounts,  most  associations 
have  the  rule  that  money  must  be  borrowed  in  even 
hundreds  of  dollars. 

What  must  be  the  character  and  amount  of  security  f 
This  is  determined  by  the  rules  of  associations. 
Generally,  however,  the  security  required  is  first 
mortgage  on  real  estate  in  the  county  where  the  asso- 
ciation operates,  or  an  assignment  of  the  stock  of  the 


*  See  Chapter  II. 


136  MANUAL  FOR 

association  on  which  there  has  been  paid  in  more 
than  the  amount  of  the  loan.  The  rule  is  to  make  no 
loans  on  property  already  encumbered,  no  matter  how 
valuable  the  property  or  small  the  encumbrance.  But 
the  money  borrowed  may  be  used  to  raise  an  encum- 
brance on  the  property  offered  as  security.  Some 
associations  accept  as  collateral  security,  government 
and  corporation  bonds,  first  mortgage  notes,  etc. 

An  association  will  usually  loan  money  to  the 
amount  of  about  two-thirds  of  the  value  of  the  prop- 
erty offered  as  security.  The  value  of  the  property  is 
determined  by  an  appraising  committee,  composed  of 
members  of  the  board  of  directors  of  the  association. 

What  is  the  cost  of  a  loan  ?  The  cost  of  a  loan  is 
made  up  of  three  items :  the  incidental  expenses,  the 
interest,  and  the  premium.  The  incidental  expenses 
consist  of  the  fees  for  appraising  property,  attorney's 
fees  for  examining  the  title  and  preparing  and  record- 
ing the  mortgage,  traveling  expenses  if  there  should 
be  any,  and  other  such  incidental  matters.  The  rate 
of  interest  is  fixed  in  the  rules  of  the  association,  and 
is  generally  at  so  many  cents  per  week  or  month  on 
each  share  or  part  thereof  loaned.  The  premium  is 
the  amount  which  the  borrower  bids  when  money  is 
sold  for  the  privilege  of  borrowing.  The  premium  is 
in  the  form  of  so  many  cents  per  week  on  each  share 
or  part  therof  borrowed,  in  addition  to  the  rate  of  in- 
terest fixed  by  the  rules  of  the  association.  The  pay- 
ment of  one  cent  per  week  on  $100  is  equivalent  to 
about  one-half  per  cent,  per  annum  interest.  With 
this,  as  a  basis,  there  will  be  but  little  difficulty  in  cal- 
culating the  cost  of  a  loan  when  interest  and  premium 
are  combined. 

Some  associations  have  a  rule  to  the  effect  that 


BUILDING  ASSOCIATIONS.  137 

borrowers  are  not  required  to  draw  out  the  entire  loan 
at  first  but  may  draw  it  in  installments  as  needed,  and 
that,  in  such  cases,  interest  will  be  charged  only  from 
the  time  that  the  money  is  actually  received.  This 
arrangement  is  an  especial  convenience  to  persons 
who  are  building  and  who  desire  to  make  payments  as 
the  work  progresses.  It  is  also  convenient  to  persons 
who  have  obligations  to  meet  at  stated  periods  as,  for 
instance,  notes  in  bank  falling  due  at  intervals.  They 
can  in  this  way  use  their  money  in  installments  with- 
out risk  or  waste.  But  the  more  general  rule  is  that 
the  full  amount  of  interest  and  premium  is  charged 
up  from  the  time  the  loan  is  made  and  the  security  is 
given,  whether  all  the  money  is  drawn  out  at  that 
time  or  not,  provided  of  course,  that  the  money  is  on 
hand  and  ready  to  be  paid  to  the  borrower. 

How  are  loans  repaid?  As  stated  before,  loans  are 
based  upon  shares.  A  borrower  must  keep  up  his 
regular  weekly  (or  monthly)  payments  of  dues,  and  in 
addition  to  this,  the  regular  weekly  (or  monthly)  in- 
stallments of  interest  and  premium  as  they  fall  due. 
We  will  suppose  that  a  member  has  secured  a  loan  of 
$1,000,  that  the  regular  dues  are  $1.00  per  week  on 
each  share  of  $500,  that  the  regular  interest  is  12  cents 
per  week  per  $100,  and  that  the  premium  which  he 
agreed  to  pay  is  at  the  rate  of  2  cents  per  week  per 
$100.  His  regular  weekly  payments  therefore  would 
be  :  dues  $2.00,  interest  $1.20,  and  premium  20  cents; 
total  $3.40.  If  payments  should  be  made  monthly  in- 
stead of  weekly,  there  would,  of  course,  be  a  propor- 
tionate increase.  The  amount  to  be  paid  regularly, 
however,  will  vary  from  time  to  time  according  to 
such  arrangements  as  the  borrower  may  make.  In 
some  associations  he  may  pay  more  or  less  than  the 


138 


MANUAL  FOR 


regular  amount  of  dues  per  week.  He  may  prefer  to 
pay  interest  and  premiums  in  advance.  When  this 
rule  holds,  the  amount  he  pays  in  goes  to  his  credit 
upon  his  shares  and  begins  to  draw  dividends,  which 
are  usually  compounded  semi-annually  the  same  as 
are  all  other  deposits.  The  greater  the  amount  he 
pays  in  in  installments  the  more  quickly  of  course 
will  his  credits  and  dividends  together  amount  to  the 
$  1,000  which  is  necessary  to  pay  off  his  loan. 

How  much  time  is  required  to  pay  up  a  loan  ?  This 
will  depend  upon  four  things :  (r)  the  rate  of  interest; 
(2)  the  amount  of  the  regular  weekly  (or  monthly) 
payments ;  (3)  the  amount  of  premium ;  (4)  the 
amount  of  dividends  earned  by  the  association. 

Where  the  rate  of  interest,  amount  of  premium, 
and  the  earnings  of  an  association  are  nearly  uniform, 
then  of  course  the  length  of  time  will  depend  simply 
upon  the  amount  of  the  payments. 

TABLES:  LOANS  AND  DEPOSITS. 

The  following  table  shows  how  long  a  loan  will 
run  with  various  weekly  payments  on  each  $100 
when  the  rate  of  interest  is  12  cents  per  week  on  each 
$100,  the  premium  is  2  cents  per  week  on  each  $100, 
and  the  earnings  of  the  association  are  7  per  cent,  per 
annum.  This  has  been  prepared  by  Mr.  A.  A.  Winters. 

Weekly  payments  ou  each  fioo.  Time  to  run. 

25  cents ii  years  24  weeks. 

30 
40 
50 
60 
70 
80 
90 
100 


6 

.4 

71 

.     7 

7Q 

•1 

6 

.2 

^6 

2 

18 

.    2 

<> 

BUILDING  ASSOCIATIONS. 
TABLE 

Showing  the  course  of  a  loan  of  $1,000. 

Premium  at  20  cents  per  week. 

Interest  at  $1.20  per  week. 

Seven  per  cent  dividends  compounded  semi-annually. 


139 


1  1,000  00' 

Payments 

$130  00 

1st 
Year.    ' 

Interest  and  premium  for  year  . 
Less  dividends  

Net  cost  of  loan     

..|7280 
..200 

70  80 

Rate  of 
Int. 

7,5, 

Principal  reduced        

59  20 

perct. 

fBal   due  beginning1  of  year 

$940  80 

2d 
Year.    4 

Payments  
Interest  and  premium  for  year  . 
Less  dividends  

Net  cost  of  loan  

.'  .'  72  80 
..    6  23 

13000 
66  57 

Rate  of 
Int. 
7    8 
'  leo 

Principal  reduced  

'Bal.  due  beginning  of  year  
Payments                              .     ... 

130  00 

63  43 

$877  37 

per  ct. 

* 

Interest  and  premium  
Less  dividends 

..  72  80 
10  75 

Rate  of 

Int. 

Year.    < 

Net  cost  of  loan 

62  05 

7,3. 

4th 
Ye"9r 

L     Principal  reduced  

'Bal.  due  beginning  of  year.  ... 
Payments  
Interest  and  premium  for  year  . 
Less  dividends  

.  .'  72  80 
.  .  15  59 

130  00 

6795 
$809  4T 

perct. 

Rate  of 

Int. 

f    *7    1 

Net  cost  of  loan 

57  21 

'l-oo 

5th 

Principal  reduced  

'  Bal.  due  beginning  of  year  
Payments  
Interest  and  premium  for  year.  . 
Less  dividends 

;  ;  72  so 

20  7(> 

130  00 

7279. 
$736  63' 

perct. 

Rate  of 

[       Int 

Year     1 

Net  cost  of  loan 

52  04 

'loo 

. 

Principal  reduced  
fBal.  due  beginning  of  year    ... 

$658  67] 

perct. 

6th 

Payments  
Interest  and  premium  for  year  . 
Less  dividends         

'.  '.  72  80 
26  31 

130  00 

Rate  of 

Int 

Year.    ' 

Net  cost  of  loan      ..        .  . 

46  44 

'  7    a 
'loo 

L     Principal  reduced.  .  . 

8351 

per  ct. 

140 


MANUAL  FOR 


7th 
Year. 


IBal.  due  beginning  of  year $575  16' 

Payments 13000 

Interest  and  premium  for  year 72  80 
Less  dividends 32  26 
Net  cost  of  loan 40  51 

Principal  reduced 89 


Rate  of 
Int. 

7.S. 

per  ct. 


fBal.  due  beginning  of  year $485  70' 

Payments      13000 

Interest  and  premium  for  year 72  80  Rate  of 

8th      J  Less  dividends  ..  3863  Int. 

Year. 

Net  cost  of  loan 34  17  'loo 

Principal  reduced 95  83. 

IBal.  due  beginning  of  year $389  87 
Payments 130  00 
Interest  and  premium  for  year 72  80  Rate  of 
Less  dividends 45  46  Int. 
7    2 
Net  cost  of  loan 27  34                       peVct. 

(.    Principal  reduced 10266 

Bal.  due  beginning  of  year $287  21 

Payments 130  00 

Interest  and  premium  for  year 72  80  Rate  of 

10th        Less  dividends 52  77  Int. 

Year.                                                                      7 

Net  cost  of  loan 2003                       perct 

Principal  reduced 109  97. 

Bal.  due  beginning  of  year $177  24 

Payments 13000 

Interest  and  premium  for  year 72  80  Rate  of 

llth        Less  dividends 6062  Int. 

Year.                                                                         A  8  8 

Netcostofloan 1218                       uioo 

perct. 

Principal  reduced  117  82 

Bal.  due  beginning  of  year $59  42" 

Payments  62  50 

12th         Interest  and  premium 35  00 

Year.       Less  dividends 32  00 

24 
we'ks          Netcostofloan 300 

Principal  reduced 59  50  j 


Time,  11  years  and  24  weeks. 
Total  amount  of  payments,  $1,492.50. 
Total  interest  and  premium,  $835.80. 
Total  dividends,  $343.38. 
Net  cost  of  loan,  $492.42. 


BUILDING  ASSOCIATIONS. 


141 


The  following  table  shows  the  length  of 
time  required  for  a  $500  share  to  mature  when  the 
dues  are  $1  per  week,  and  the  dividends  at  the  rate  of 
7  per  cent  per  annum  : 


TIME. 

Amount 
paid  in. 

Dividends 
on  same. 

Value  of 
Sharsseach 
half  year. 

Value  of 
Shares  each 
year. 

1st  year. 

End  of  26  weeks. 
"     52       " 

$26  00 
52  00 

$      45 

1  40 

$26  45 

$53  85 

2d  year. 

"     26       " 
"     52       " 

78  00 
104  00 

2  34 
3  36 

82  19 

111  55 

3d  year. 

"     26        " 
"     52        " 

130  00 
156  00 

4  37 
5  42 

141  92 

173  34 

4th  year. 

"     26        " 
"     52        " 

182  00 
208  00 

6  54 

7  66 

205  88 

239  54 

5th  year. 

"     26       " 
"     52        " 

234  00 
260  00 

8  85 
10  08 

274  39 

310  47 

6th  year. 

"     26       " 
"     52        " 

28600 
312  00 

11  34 
12  63 

347  81 

386  44 

7th  year. 

"     26        " 
"     52        " 

338  00 
364  00 

14  00 
15  40 

426  44 

467  84 

8th  year. 

"     26 

390  00 

16  83 

510  67 

$120  67 

Total  length  of  time,  7  years  6  months. 

"    amount  paid  in  as  dues $390  00 

41        "        dividends    at    7%   per    annum   credited 

every  six  months 120  67 


Total  credits  on  share $510  67 


142 


MANUAL  FOR 


The  following  table  shows  the  length  of 
time  required  for  the  payment  of  a  loan  of  $500  (one 
share)  when  the  dues  are  $1  per  week,  the  dividends  8 
per  cent  per  annum,  the  premium  5  cents  per  week, 
and  the  interest  6  per  cent  per  annum  • 


TIME. 

DUES. 

Divi- 
dends. 

Ain't  due 
each  year 
on  which 
interest  is 
paid. 

Interest. 

Pre- 
mium. 

TOTAL. 

Interest 
and  Frem. 

1st  year 

$52  00 

$2  1.6 

Aa'tborrVd 
less  dues  and 
dividends. 

$500  00 
54  16 

$30  00 

$2  60 

$32  60 

2d    " 
3d    " 

52  00 
52  00 

2  16 
2  Ib 

ft 

445  84 
54  16 

26  76 
23  52 

2  60 
2  60 

29  36 
26  12 

391  68 
54  16 

4th  " 
5th  " 
6th   " 
7th  " 

52  00 
52  00 
52  00 
52  00 

2  lb 
2  16 
-  2  16 
2  16 

i  ( 

337  52 
54  16 

20  28 
16  98 
13  74 
10  50 

2  60 
2  60 
2  60 
2  60 

22  88 
19  58 
16  34 
13  10 

283  36 
54  16 

229  20 
54  16 

175  04 
54  16 

8th  " 
9th  " 

52  00 
52  00 

2  16 
2  16 

" 

120  88 
54  16 

7  26 
4  02 

2  60 
2  60 

9  86 
6  62 

66  72 
54  16 

12w'ks 
Totals 

12  56 

12  56 

20 

60 

80 

480  56 

$19  44 

H153  26 

£24  00 

£177  26 

Total  Dues,         $480.56 
"    Dividends,    19.44 


Total  Interest,    $153.26 
"     Premium,      24.00 


"     Credits.  .  .$500  00  Total  cost  of  loan,  $177.26 

$500  at  simple  interest  at  6%  for  9  years  and  12  weeks 

would  cost  .  $277.50 


BUILDING  ASSOCIATIONS.  143 

• 

Advantag&s  of  a  Building  Association  Loan.  With 
many  a  person  it  is  easy  to  pay  off  a  loan  in  install- 
ments where  it  would  be  impossible  to  meet  the  entire 
indebtedness  at  once.  Money  borrowed  from  private 
persons  or  corporations  is  usually  loaned  on  mortgage 
for  one  year.  At  the  end  of  the  year  it  must  either 
be  paid  or  a  new  loan  must  be  negotiated  which  in- 
volves a  repetition  of  all  the  original  trouble,  expense, 
and  anxiety.  The  time  when  a  note  is  coming  due 
which  is  secured  by  a  mortgage  on  one's  home  is  not 
a  pleasant  day  to  which  to  look  forward.  It  so  often 
happens  that  the  money  which  the  borrower  thought 
he  would  have  saved  up  against  the  evil  day  is  not 
forthcoming.  Indeed,  not  infrequently  the  borrower 
finds  difficulty  in  paying  even  the  interest.  In  bor- 
rowing from  a  building  association  all  this  annual  or 
periodical  uneasiness  is  avoided.  Each  week  or 
month  takes  care  of  itself,  the  burden  is  evenly  dis- 
tributed, and  one  can  readily  regulate  his  habits  and 
manner  of  life  to  conform  to  his  necessities.  Week  by 
week  the  regular  installments  are  paid,  almost  without 
feeling  them,  and  the  loan,  which  would  be  a  terrible 
burden  if  it  must  be  paid  in  one  sum,  is  carried  and 
ultimately  paid  off  with  ease. 

In  borrowing  from  an  association  a  member  should 
make  such  arrangements  for  his  payments  as  are  not 
likely  to  become  burdensome.  It  is  better  to  arrange 
to  make  them  as  low  as  is  consistent  with  safety. 
Then  if,  from  time  to  time,  the  borrower  finds  that  he 
can  pay  more  than  the  agreed  amount  let  him  do  so. 
And  the  amount  thus  paid  in  in  advance  will  not 
only  stand  to  his  credit  but,  in  many  associations,  will 
draw  dividends  in  his  favor.  Moreover,  'by  thus  get- 


144  MANUAL  FOR 

ting  some  distance  ahead  with  his  payments,  in  case 
of  sickness,  loss  of  work,  or  some  other  misfortune, 
he  may  cease  making  payments  for  a  time  without 
falling  into  arrears  or  being  in  danger  of  losing  his 
property. 

If  a  borrower  unexpectedly  finds  himself  able  at 
any  time  to  pay  off  all,  or  a  considerable  portion  of 
his  loan,  it  is  better  for  him  to  do  so.  He  not  only 
relieves  himself  of  an  obligation  by  doing  so  and,  in 
most  cases,  stops  his  interest,  but  he  puts  himself  in 
such  position  that  he  may  begin  to  accumulate  money 
for  himself  which  may  be  profitably  invested  in  the 
association  or  in  some  other  way. 

CONTINGENT  OR  RESERVE  FUND. 

In  the  course  of  time  in  almost  every  association 
some  losses  will  occur  and  some  extra  expenses  will 
arise.  If  these  should  be  taken  as  they  occur  in  a 
lump  out  of  the  current  earnings  or  receipts  of  the 
association,  they  would  diminish  the  regular  divi- 
dends for  that  period  to  such  an  extent  as  would 
create  dissatisfaction  among  the  stockholders.  In 
order,  therefore,  to  be  prepared  for  emergencies  of 
this  character,  the  directors  should  from  the  beginning 
of  the  association,  when  the  dividends  are  declared, 
set  aside  some  portion  of  the  profits  for  a  reserve 
fund  to  meet  any  contingent  expenses  or  losses  which 
may  arise.  The  proportion  of  profits  to  be  set  aside 
for  a  reserve  fund  should  be  left  to  the  discretion 
of  the  directors  to  be  decided  at  the  regular  semi- 
annual periods.  It  is  not  likely  that  occasions  will 
often  occur  when  it  will  be  necessary  to  set  aside 
more  than  one-tenth  or  one-eighth  of  the  profits  for 


BUILDING  ASSOCIATIONS.  145 

the  contingent  fund.  This  reserve  fund  should  be 
held  faithfully  for  the  purpose  for  which  it  is  estab- 
lished. No  member  should  be  allowed  to  have  any 
claim  upon  it.  But  when  a  member's  shares  mature 
and  he  draws  out  his  money,  he  is  then  entitled  to 
withdraw  his  pro  rata  proportion  from  the  reserve 
fund.  Provision  for  a  reserve  fund  is  fixed  by  statute 
in  some  states. 

UNDIVIDED  PROFITS. 

In  the  periodical  apportionment  of  the  profits  of 
the  association  there  is  nearly  always  a  little  residue 
left  over,  from  the  fact  that  it  is  a  very  laborious 
undertaking  to  calculate  and  divide  the  gains  down  to 
a  very  small  fractional  part.  The  custom  is  to  fix  the 
dividend  at  such  a  rate  as  approximates  closely  to  the 
gains  of  the  association,  but  which  may  be  expressed 
either  by  a  whole  number  or  a  mixed  number  in 
which  the  fraction  is  of  a  convenient  denomination  to 
use  in  calculations.  To  illustrate:  The  actual  gains 
of  an  association  might  be  7  fV*  per  cent.  Assuming 
that  YZ  of  one  per  cent,  is  placed  to  the  credit  .of 
the  contingent  fund,  this  would  leave  7T|  0  per 
cent.  To  calculate  the  dividends  of  each  member 
at  this  rate  would  put  upon  the  secretary  a  large 
amount  of  very  laborious  figuring  and  involve  no 
little  liability  to  error.  To  avoid  this  the  rate  of  the 
dividend  would  propably  be  fixed  at  7  per  cent.  This 
leaves  ^  \  0  of  one  per  cent,  of  the  profits  for  that  term 
which  are  undivided.  Also  in  the  calculations  there 
will  be  some  small  undivided  profits.  Some  associa- 
tions pass  these  fractional  portions  of  undivided  pro- 
fits to  the  credit  of  the  contingent  fund ;  others  place 


146  MANUAL  FOR 

them  in  what  is  called  the  undivided  profit  account* 
When  these  are  carried  in  the  latter  way  the  amounts 
left  over  from  period  to  period  should  be  added  to  the 
gains  for  each  closing  period  before  the  dividends  are 
declared.  Where  the  undivided  profits  are  passed  to 
the  credit  of  the  contingent  fund,  they,  of  course,  be- 
come liable  to  all  the  conditions  covering  that  fund. 

MORTGAGES  :  CUSTODY,  RECORDING,  ETC. 

Mortgages  should  be  placed  upon  the  records  of 
the  county  in  which  the  mortgaged  property  is  located. 
This  should  be  done  immediately  after  their  execution 
in  order  to  secure  the  proper  priority  of  lien.  One  of 
the  officers  of  the  association  (president,  secretary,  or 
treasurer)  should  be  entrusted  with  this  duty.  It  is 
advisable  to  provide  this  officer  with  a  book  contain- 
ing certificates  of  record  to  be  signed  by  the  recorder, 
clerk,  or  prothonotary,  with  whom  the  mortgage  is 
left  for  recording.  The  blank  for  these  certificates 
should  be  about  as  follows  : 

Received  for  record 189. .  at  . .  o'clock  . . . 

t 

minutes  . .  M.  from  The  Building  and  Loan  Associa- 
tion, a  mortgage  given  by to  said  associa- 
tion, dated  189. . 


of County, 


When  a  mortgage  has  been  fully  satisfied  it  should 
be  discharged  forthwith  by  a  certificate  of  satisfaction 
by  the  president ;  or  president  and  secretary,  as  the 
rule  may  be,  for  entry  upon  the  county  records.  If 
this  certificate  is  indorsed  upon  the  back  of  the  mort- 
gage it  may  be  in  this  form  : 


BUILDING  ASSOCIATIONS.  14? 

The  foregoing  and  within  mortgage  has  been  fully  paid 
and  satisfied  and  the  recorder  (clerk,  or  prothonotary,  as  the 
case  may  be)  is  hereby  authorized  to  cancel  the  same  off  of 

the  records  of County 

The Building  and  Loan  Association, 

By ,  President, 

,  Secretary. 

If  the  certificate  of  satisfaction  is  upon  a  separate 
sheet  it  must  contain  an  accurate  description  of  the 
mortgage  designated  for  cancellation  with  the  number 
of  the  mortgage  book  and  the  page  where  the  same  is 
recorded. 

The  mortgages  held  by  an  association  should  not 
be  left  in  the  possession  of  any  one  of  the  officers, 
since  this  places  a  needless  and  irksome  responsibility 
upon  such  officer,  and  since,  in  such  custody,  they 
might  be  liable  to  be  lost  or  mislaid.  They  should  be 
placed  in  the  fire- proof  safe  of  the  association  if  it  has 
one  ;  if  it  has  none  they  ought  to  be  deposited  in  the 
safe  of  some  bank  or  in  a  safe-deposit  vault,  even  if  a 
small  expense  be  incurred  thereby.  The  mortgages 
as  filed  away  should  be  properly  arranged,  either 
alphabetically  according  to  the  names  of  the  mort- 
gagors, or  in  numerical  order  corresponding  with  the 
numbers  of  the  members  or  shareholders  executing 
them,  so  that  any  particular  mortgage  may  be  found 
readily. 

If  a  fire  insurance  policy  is  held  as  collateral  to  the 
mortgage,  the  policy  should  be  filed  with  the  mort- 
gage, a  band  or  string  holding  the  two  papers  to- 
gether or  both  being  enclosed  in  an  envelope. 


148  MANUAL  FOR 

INSURANCE  POLICIES  AS  COLLATERAL  SECURITY. 

In  all  cases  where  the  value  of  the  land  mortgaged 
is  not  sufficient  to  secure  the  loan,  and  there  are  build- 
ings upon  the  land  which  are  included  in  the  mort- 
gage, fire-insurance  policies  on  these  buildings  should 
be  required.  These  policies  should  be  assigned  to  the 
association.  But  in  cases  where  the  value  of  the  land 
is  evidently  sufficient  to  cover  the  amount  of  the  loan, 
including  interest  and  costs  of  suit  in  case  of  a  fore- 
closure, less  the  amount  already  paid  in  by  the  share- 
holder, it  is  not  only  unreasonable  to  require  the 
assignment  of  a  fire  insurance  policy  but  it  also  makes 
needless  work  for  the  officers  of  the  association  hav- 
ing charge  of  insurance  matters. 

It  should  be  made  the  duty  of  the  secretary  or  of 
some  other  officer  to  keep  a  record  of  all  the  fire  poli- 
cies held  as  collateral  security.  This  record  should  in- 
clude the  name  and  address  of  the  company  or  of  the 
agent  issuing  the  policy  and  a  sufficient  description  of 
the  policy  itself  to  make  it  easily  recognizable.  The 
record  should  be  indexed  with  the  names  or  numbers 
of  the  shareholders  assigning  the  policies  so  that 
reference  may  be  made  to  each  readily.  The  record 
of  policies  should  also  be  arranged  in  monthly  groups 
showing  when  the  policies  expire. 

The  month  before  the  expiration  of  a  policy  the 
officer  having  charge  of  this  matter  should  notify  the 
mortgagor  of  the  approaching  expiration  of  his  policy 
and  request  that  it  be  renewed  on  or  before  the  meet- 
ing day  next  preceding  its  expiration.  At  this  meet- 
ing the  certificate  of  entry  of  renewal  duly  signed  by 
the  agent  or  representative  of  the  insurance  company 
must  be  furnished  to  said  officer  of  the  association. 


BUILDING  ASSOCIATIONS.  149 

When  an  entry  on  the  policy  by  the  representative  of 
the  insurance  company  is  required,  the  policy  should 
be  delivered  to  the  mortgagor  for  that  purpose  to  be 
returned  at  the  meeting  as  before  stated. 

If  a  borrower  shall  pay  off  a  portion  of  his  loan, 
reducing  it  to  such  an  extent  that  the  land  covered  by 
his  mortgage  independent  of  the  buildings  thereon  is 
sufficient  security  for  the  loan,  then  his  fire  policy 
should  be  returned  to  him  with  the  proper  certificate 
of  satisfaction  and  relinquishment  either  endorsed 
upon  the  policy  itself  or  upon  a  special  blank  for  that 
purpose.  If  endorsed  upon  the  policy  it  may  be  in 
these  words : 

189-- 

The  security  for  which  this  policy  has  been  held  by  The 
Building  and  Loan  Association  is  hereby 

relinquished. 

President, 

Secretary, 

The  Building  and  Loan  Association. 

When  a  special  blank  is  used  it  must  give  the 
number  and  the  date  of  the  policy  and  the  name  of  the 
insurance  company  issuing  it,  in  addition  to  the  words 
signifying  relinquishment. 

If  a  loan  is  secured  by  mortgage  on  a  terminating 
leasehold  the  policy  of  insurance  should  be  held  as 
collateral  until  the  final  satisfaction  of  the  mortgage. 
Then  the  policy  with  the  mortgage  should  be  sur- 
rendered with  the  proper  certificate  of  satisfaction  as 
above. 


i5o  MANUAL  FOR 

LEASEHOLDS. 

When  a  leasehold  is  mortgaged  to  an  association 
the  secretary  or  other  officer  whose  duty  it  may  be 
should  enter  in  a  book  kept  for  that  purpose  a  copy 
of  the  forfeiture  clause  of  the  lease  ;  likewise  the  dates 
when  ground  rents  become  due,  arranged  in  monthly 
groups  as  indicated  above  for  the  insurance  policies. 
Receipts  for  the  payment  of  the  rental,  taxes,  and 
assessments,  if  any,  should  be  presented,  at  the  latest, 
at  the  meeting  preceding  the  expiration  of  the  term 
of  forfeitures  and  the  entry  that  such  receipts  have 
been  produced  should  be  made  on  the  book  of  the 
proper  officer. 

TAXES  AND  ASSESSMENTS. 

Mortgagors  should  be  required,  subject  to  penalties 
fixed  by  the  rules,  to  present  to  the  proper  officers  of 
the  association  their  tax  or  assessment  receipts  at  the 
farthest  within  one  month  after  the  last  day  when  they 
were  payable.  An  entry  should  be  made  in  a  book 
kept  for  that  purpose  to  the  effect  that  such  a  receipt 
was  duly  produced. 

PAYMENT  OF  DIVIDENDS. 

It  is  the  practice  in  some  associations  for  the  mem- 
bers to  draw  out  their  dividends  at  the  end  of  each 
:erm.  This  is  probably  a  bad  rule.  Associations  are 
organized  for  the  purpose  of  enabling  and  encouraging 
their  members  to  save  money.  If  the  members  draw 
out  their  dividends  regularly  they  are  apt  to  expend 
this  money  which  they  might  otherwise  save.  Unless 
a  member  absolutely  needs  his  dividends  it  is  better 
for  him  to  allow  them  to  stand  to  his  credit.  In  asso- 


BUILDING  ASSOCIATIONS.  151 

ciations  where  the  dividends  are  not  drawn  out  they 
usually  are  compounded  from  term  to  term  and  thus 
assist  materially  in  increasing  a  member's  income. 
It  is  an  advantage  to  the  association  also  for  the  divi- 
dends to  be  left  in  the  treasury.  In  an  average  asso- 
ciation doing  a  prosperous  business,  the  semi-annual 
dividends  will  amount  to  a  considerable  sum  which 
can  be  profitably  loaned  or  invested  by  the  association. 

But  where  the  dividends  are  paid  at  the  end  of 
each  term  the  directors  must  make  special  provision 
to  have  the  money  on  hand  with  which  to  pay  them. 
If  dividends  are  not  forthcoming  when  expected,  sus- 
picions may  arise  and  there  may  be  a  loss  of  confi- 
dence among  the  members. 

In  paying  dividends  *  it  is  convenient  to  have  each 
member's  money  placed  in  an  envelope  beforehand  so 
that  on  the  meeting  night  it  can  be  handed  to  him 
without  any  delay.  The  envelope  may  be  printed 
about  as  follows  : 

Book  No  ............ 

............................................  Dividend  of 

The  .................  ...............................  .  ....... 

Building  and  Loan  Association  for  term  ending  .............. 


Name 
Amount  $ 


As  these  envelopes  containing  the  dividends  are 
distributed  to  the  members  each  member  should  sign 
a  receipt  in  the  following  form  : 


*  For  methods  of    calculating  dtridends    and   dividend    tables    see 
Chapter  XVI. 


i5o  MANUAL  FOR 

LEASEHOLDS. 

When  a  leasehold  is  mortgaged  to  an  association 
the  secretary  or  other  officer  whose  duty  it  may  be 
should  enter  in  a  book  kept  for  that  purpose  a  copy 
of  the  forfeiture  clause  of  the  lease ;  likewise  the  dates 
when  ground  rents  become  due,  arranged  in  monthly 
groups  as  indicated  above  for  the  insurance  policies. 
Receipts  for  the  payment  of  the  rental,  taxes,  and 
assessments,  if  any,  should  be  presented,  at  the  latest, 
at  the  meeting  preceding  the  expiration  of  the  term 
of  forfeitures  and  the  entry  that  such  receipts  have 
been  produced  should  be  made  on  the  book  of  the 
proper  officer. 

TAXES  AND  ASSESSMENTS. 

Mortgagors  should  be  required,  subject  to  penalties 
fixed  by  the  rules,  to  present  to  the  proper  officers  of 
the  association  their  tax  or  assessment  receipts  at  the 
farthest  within  one  month  after  the  last  day  when  they 
were  payable.  An  entry  should  be  made  in  a  book 
kept  for  that  purpose  to  the  effect  that  such  a  receipt 
was  duly  produced. 

PAYMENT  OF  DIVIDENDS. 

It  is  the  practice  in  some  associations  for  the  mem- 
bers to  draw  out  their  dividends  at  the  end  of  each 
:erm.  This  is  probably  a  bad  rule.  Associations  are 
organized  for  the  purpose  of  enabling  and  encouraging 
their  members  to  save  money.  If  the  members  draw 
out  their  dividends  regularly  they  are  apt  to  expend 
this  money  which  they  might  otherwise  save.  Unless 
a  member  absolutely  needs  his  dividends  it  is  better 
for  him  to  allow  them  to  stand  to  his  credit.  In  asso- 


BUILDING  ASSOCIATIONS.  151 

ciations  where  the  dividends  are  not  drawn  out  they 
usually  are  compounded  from  term  to  term  and  thus 
assist  materially  in  increasing  a  member's  income. 
It  is  an  advantage  to  the  association  also  for  the  divi- 
dends to  be  left  in  the  treasury.  In  an  average  asso- 
ciation doing  a  prosperous  business,  the  semi-annual 
dividends  will  amount  to  a  considerable  sum  which 
can  be  profitably  loaned  or  invested  by  the  association. 

But  where  the  dividends  are  paid  at  the  end  of 
each  term  the  directors  must  make  special  provision 
to  have  the  money  on  hand  with  which  to  pay  them. 
If  dividends  are  not  forthcoming  when  expected,  sus- 
picions may  arise  and  there  may  be  a  loss  of  confi- 
dence among  the  members. 

In  paying  dividends  *  it  is  convenient  to  have  each 
member's  money  placed  in  an  envelope  beforehand  so 
that  on  the  meeting  night  it  can  be  handed  to  him 
without  any  delay.  The  envelope  may  be  printed 
about  as  follows : 

Book  No 

Dividend  of 

The.. 

Building  and  Loan  Association  for  term  ending 

189... 

Name 

Amount  $  

As  these  envelopes  containing  the  dividends  are 
distributed  to  the  members  each  member  should  sign 
a  receipt  in  the  following  form  : 

*  For  methods  of    calculating  dtyidends    and   dividend    tables   see 
Chapter  XVI. 


152  MANUAL  FOR 

189- 


Received  of  The  

Building  and  Loan  Association  the  sum  of 

dollars  in  full  for  dividend  for  term  ending 


Book  No. 


These  receipts  may  be  loose,  or  bound  in  book 
form.  If  loose,  after  they  have  been  signed,  they 
should  be  filed  either  in  the.  numerical  order  of  the 
members'  pass-books,  or  in  the  alphabetical  order  of 
the  members'  names,  so  that  they  can  be  referred  to 
readily. 

Some  associations  pay  dividends  by  issuing  war- 
rants upon  the  Treasurer  who  cashes  them  on  presen- 
tation. These  warrants  are  in  the  following  form : 

No 

189... 

Treasurer  of 

The Building  and  Loan  Association  : 

Pay  to  the  order  of the  sum  of 

dollars,  dividend  in  full  for  term 

ending 189 .  . . 

Secretary. 


In  some  states  the  statutes,  and  in  many  associa- 
tions the  rules,  require  that  all  moneys  shall  be 
deposited  in  bank  and  paid  by  check. 


BUILDING  ASSOCIATIONS.  153 

DUES,  DEPOSIT  SLIPS,  ETC. 

At  the  appointed  time  for  the  payment  of  dues  the 
tables  should  be  cleared  and  conveniently  arranged. 
The  secretary  and  his  assistants  and  the  finance  com- 
mittee should  take  proper  position.  The  dues  book 
should  lie  open  in  the  most  convenient  place  for  use 
by  the  secretary  or  other  person  receiving  the  pay- 
ments, and  for  reference  by  his  assistants  and  the 
members  of  the  finance  committee.  Regular  money 
boxes  should  be  provided  for  assorting  and  depositing 
the  money  as  received. 

It  will  greatly  facilitate  business  if  associations  will 
use  deposit  slips  or  deposit  envelopes.  These  are 
also  of  great  advantage  and  convenience  in  checking 
up  for  any  errors  which  may  arise. 

PAYING  OFF  SHARES. 

Before  the  directors  pay  up  shares  in  full  or  re- 
linquish mortgages,  they  should  consider  carefully  the 
association's  liabilities  so  that  they  may  know — 

1 .  What  losses  are  liable  to  occur  ; 

2.  What  mortgages  are  likely  to  prove  bad ; 

3.  What  inside  creditors  the  association  has  ; 

4.  Whether  or  not  the  existing  reserve  fund  is 
sufficient  to  cover  all  such  liabilities. 

Thus  the  directors  may  protect  the  association 
from  any  possible  shortage.  In  case  of  withdrawal  at 
any  time  when  losses  are  pending,  the  shares  with- 
drawn should  be  debited  with  their  equitable  propor- 
tion of  the  impending  liability.  If  this  is  not  made 
the  rule  knowing  members,  when  the  association  may 
be  under  threatened  temporary  embarrassment,  would 
withdraw  their  shares  and  escape  without  losses,  while 


154  MANUAL  FOR 

the  faithful  and  unsuspicious  members  remaining  over 
would  be  compelled  to  meet  the  emergency. 

It  must  not  be  imagined  that  this  prudence  is  un- 
necessary because  of  the  fact  that,  generally  speaking, 
building  associations  conducted  on  the  permanent 
plan  are  prosperous  and  run  along  smoothly  from 
year  to  year  without  embarrassment.  Unexpected 
circumstances  may  arise  in  the  affairs  of  an  associa- 
tion just  as  in  any  other  business  enterprise.  The 
officers,  through  inexperience  or  carelessness,  may 
make  mistakes.  A  neighboring  association  may  de- 
clare large  dividends.  Then  the  officers  think  that 
their  own  association  can  do  as  well,  and  will  increase 
their  own  dividends  and  pay  out  for  profits  more  than 
the  association  has  earned.  Any  increase  in  dividends 
has  a  very  pleasing  and  quieting  effect  upon  members. 
As  a  result  the  members  themselves,  under  such  cir- 
cumstances, become  more  careless,  and,  in  consequence 
without  any  evil  intent  on  the  part  of  either  officers 
or  members,  unexpected  embarrassment  may  arise. 
It  is  well  to  anticipate  all  such  emergencies  before- 
hand, and  thus  to  be  prepared  for  them.  It  is  easy  to 
under-estimate  an  association's  liabilities  to  borrow- 
ing members  on  the  one  hand,  and  to  over-estimate 
the  value  of  mortgages  on  advanced  shares  on  the 
other. 

Another  serious  mistake  which  has  often  been 
made,  principally  in  associations  conducting  their 
business  on  the  gross  plan,  is  to  divide  the  profits  at 
the  end  of  the  first  term.  If  this  is  done  a  member 
coming  in  during  the  second  term  would  afterwards 
have  no  share  of  certain  profits  to  which  in  the  course 
of  time  he  would  be  justly  entitled.  In  .some  reports 


BUILDING  ASSOCIATIONS.  155 

0 

unearned  premiums  and  unearned  interest  will  be 
found  reckoned  as  assets.  This  is  certainly  a  mistake 
since  in  each  new  term  these  assets  must  be  reduced 
by  the  amount  which  must  be  placed  to  the  credit  or 
profits  for  that  term. 

In  some  instances  we  have  found  reported  as 
assets  the  entire  outstanding  re-payments  having  an 
unexpired  term,  without  any  reduction  or  discount 
being  made  for  the  time  that  must  elapse  before  they 
shall  be  paid. 


158  MANUAL  FOR 

their  own  money  that  is  invested  in  the  business.  They 
invest  this  according  to  their  own  judgment,  and  handle 
the  business  at  their  own  discretion.  In  consequence 
they  are  naturally  watchful  and  painstaking  in  all  they 
do,  their  time  and  thought  being  devoted  to  the  busi- 
ness. If  the  business  prospers,  well  and  good.  But 
if  they  find  that  it  is  not  prospering  they  may,  without 
consulting  any  one,  proceed  to  close  it  up. 

In  the  management  of  a  building  association  the 
conditions  are  different.  The  directors  and  officers 
have  some  financial  interest  in  it,  but  this  interest  is 
likely  to  be  of  min6r  importance  as  compared  with 
their  other  and  outside  individual  interests,  and  it  is 
also  unimportant  as  compared  with  the  aggregate 
interest  of  the  association.  The  case  is  different  in 
the  management  of  any  private  individual  enterprise, 
or  of  the  business  of  any  regular  business  firm  or  cor- 
poration. In  a  private  enterprise  the  managers  give 
to  the  business  their  whole  time  and  thought.  In  the 
management  of  the  business  of  a  building  association 
it  is  only  incidentally  that  time  and  thought  are  given 
to  it.  l,et  the  officers  of  an  association  be  ever  so 
conscientious,  ever  so  much  interested,  nevertheless 
the  opportunities  for  error  are  greater  in  an  associated 
than  in  a  private  enterprise.  An  association's  business 
is  open  to  many  more  risks  of  the  mis-use  or  non-use 
of  powers  on  the  part  of  managers  than  is  the  case 
where  proprietary  interests  are  involved  <and  the 
management  is  embodied  in  one  or  a  few  men  whose 
duty  and  interest  it  is  to  make  it  their  sole  occupation 
to  watch  over  and  administer  their  own  affairs. 

These  facts  give  rise  to  a  special  necessity  for  the 
systematic  and  regular  auditing  of  the  accounts  of 


BUILDING  ASSOCIATIONS.  159 

every  co-operative  enterprise.  This  necessity  is  of  a 
dual  and  reciprocal  nature.  It  is  due  on  the  one  hand 
for  the  protection  of  the  society's  interests  and  the 
individual  interests  of  the  members.  On  the  other 
hand  it  is  necessary  for  the  protection  and  proper 
endorsement  of  the  officers  in  the  discharge  of  their 
duties. 

Indirectly  also  another  important  reason  exists  for 
the  careful  administration  and  auditing  of  the  affairs 
of  every  building  association.  It  is  only  by  such 
systematic  watchfulness  that  the  best  success  and 
prosperity  of  an  association  can  be  secured  and  assured. 
Any  failure  of  an  association,  be  it  complete  or  partial, 
is  very  unfortunate,  not  only  for  the  individual  share- 
holders but  also  for  the  community.  Such  an  occur- 
rence goes  far  towards  creating  a  distrust  of  this 
method  of  co-operation.  Such  a  distrust  once  aroused 
is  likely  to  continue  for  one  or  two  generations. 
Persons  who  lose  money  in  a  building  association  will 
be  very  slow  to  risk  their  earnings  in  another  such 
institution,  and  their  families,  neighbors,  and  friends 
will  be  influenced  strongly  by  their  opinion  and 
attitude.  Such  a  failure  not  only  causes  embarrass- 
ment to  associations  already  in  operation,  but  pre- 
vents the  establishment  of  other  associations  in  that 
immediate  vicinity.  The  influence  goes  farther,  for, 
those  who  have  suffered  by  it,  removing  into  new 
neighborhoods  and  communities,  even  at  a  great  dis- 
tance, carry  with  them  the  story  of  their  unfortunate 
experience,  and  this  may  be  sufficient  to  prevent  the 
establishment  of  such  societies  elsewhere.  Upon  this 
ground  alone  it  behooves  all  persons  who  are  interested 
in  the  welfare  of  this  form  of  co-operation,  and  who 


160  MANUAL  FOR 

are  convinced  of  the  good  that  it  is  accomplishing, 
and  of  the  great  future  that  awaits  it,  to  insist  upon 
the  regular  and  responsible  auditing  of  the  accounts 
in  the  associations  with  which  they  are  connected. 

Many  other  considerations  of  like  general  character, 
showing  the  necessity  of  the  regular  and  thorough 
auditing  of  the  accounts  of  building  associations, 
will  suggest  themselves  to  the  intelligent  reader,  and 
need  not  be  mentioned  here. 

PURPOSES  OF  AUDITING. 

One  of  the  most  hopeful  indications  of  the  future 
prosperity  and  usefulness  of  the  building  association 
system  is  to  be  seen  in  the  fact  that  more  and  more 
the  question  of  official  supervision  and  compulsory 
auditing  is  receiving  attention.  That  this  system  of 
co-operative  saving  shall  have  continued  popularity  it 
must  hold  the  confidence  of  the  people.  This  can  be 
accomplished  only  by  throwing  about  it  such  wise 
safeguards  as  experience  has  shown  to  be  necessary  in 
order  to  make  and  keep  it  worthy  of  such  confidence. 

Auditing  is  supervision  practically  applied.  It 
means  not  only  testing  the  accuracy  and  the  trust- 
worthiness of  the  accounts,  and  the  honesty  and 
efficiency  of  officers,  but  it  includes  also  the  testing 
and  the  perfecting  of  methods,  and  the  securing  of 
practical  economy.  It  involves  the  proving  of  the 
conduct  of  an  association  by  the  fundamental  prin- 
ciples upon  which  this  form  of  co-operation  is  based 
on  the  one  hand,  and  also  by  external  checks  and 
testimony  on  the  other.  A  proper  audit  reviews  both 
the  plan  and  the  method  of  the  society,  and  also  its 
practical  operations. 


BUILDING  ASSOCIATIONS.  161 

An  association,  properly  organized  and  properly 
operated,  is  like  a  complicated  piece  of  machinery,  in 
which  each  part  is  nicely  adjusted  to  fit  into  its 
corresponding  parts,  so  that  all  work  together  in  a 
perfect  co-ordination,  with  the  least  friction,  and  with 
economy  of  power,  and  reach  the  highest  productive 
or  executive  possibility.  Only  a  regular  systematic 
audit  will  keep  the  machinery  of  an  association  in 
good  form  and  perfect  running  order.  If  an  audit  has 
no  other  effect  than  to  cause  an  association  to  keep  up 
proper  appearances,  it  fulfills  an  important  function. 
The  audit  takes  the  affairs  of  the  society  as  it  finds 
them  and  compares  them  with  what  they  would  be  if 
ideally  perfect,  and  thus  furnishes  a  test  of  the  actual 
status  of  the  organization  and  a  corresponding  gauge 
of  its  usefulness  and  its  title  to  confidence. 

Formulated  somewhat  specifically,  the  principal 
reasons  why  the  accounts  of  an  association  should  be 
audited  regularly  and  carefully  are  as  follows : 

1.  For  the  protection  of  the  business  of  the  asso- 
ciation as  a  corporate  body. 

2.  For  the  protection  of  the  individual  members, 
both  creditors  and  borrowers. 

3.  To  determine  that  the  business  is  conducted 
according    to    statutory    requirements,   and    also   in 
harmony  with  the  provisions  of  the  constitution  of 
the  association. 

4.  For  the  purpose  of  determining  whether  the 
business  of  the  association  is  conducted  economically 
and  according  to  the  most  approved  and  best  labor- 
saving  systems. 

5.  For  the  purpose  of  having  available  at  all  times 
and  for  any  purpose  a  verified  and  reliable  statement 
of  the  association's  affairs. 


i62  MANUAL  FOR 

6.  To  elevate  and  maintain  the  standing  of  the 
association  as  one  of  the  competitive  financial 
institutions  of  the  community,  and  to  supply  the 
necessary  evidences  of  its  safety  and  prosperity  to  all 
persons  who  would  make  desirable  members. 

PROTECTION  OF  CORPORATE  INTERESTS. 

Practically  an  association  is  a  business  partnership. 
Bach  member  commits  his  capital  to  it  as  he  pays  in 
his  regular  installments.  This  capital,  in  its  aggregate 
interest,  is  risked  in  the  transactions  of  the  association. 
It  must  be  guarded,  not  only  from  thieves  who  would 
break  through  and  steal,  but  from  speculative  risks 
and  embezzlement.  It  must  be  directed  into  the 
channels  for  which  it  is  intended.  It  must  be  so 
handled  as  to  make  it  productive  in  the  highest  pos- 
sible legitimate  degree.  It  must  have  all  the  care, 
and  the  same  kind  of  care,  necessary  in  the  manage- 
ment of  any  purely  individual  or  private  interest. 
The  association's  prosperity  is  dependent  upon  the  con- 
fidence and  the  co-operation  of  its  own  members.  It 
deals  only  with  members.  The  officers  must  not  only 
be  capable  and  trustworthy,  but  must  so  keep  the 
records  and  accounts  that  the  actual  financial  condition 
of  the  association  and  the  results  of  its  business  opera- 
tions may  be  at  any  time  readily  and  correctly  ascer- 
tained. When  the  accounts  are  kept  correctly  and 
stand  the  test  of  a  careful  audit,  the  members  are 
enabled  to  judge  as  to  the  safety  and  the  profit  of 
their  investments.  Any  irregularity  of  management 
will  be  discovered  before  it  reaches  such  proportions 
as  to  jeopardize  the  stability  or  the  solvency  of  the 
association. 


B UILDING  ASSOCIATIONS.  1 63 

PROTECTION  OF  MEMBERS. 

Members  of  an  association  entrust  their  surplus 
earnings  to  it  in  order  to  save  them.  If  it  were  not 
for  this  purpose  of  saving  they  would  have  no  use  for 
the  association.  When  a  properly  verified  balance 
sheet  is  presented,  showing  that  the  money  actually 
saved,  is  safe,  and  is  moreover  so  invested  that  it  is 
earning  something,  and  that  there  are  no  actual  or 
prospective  losses,  deficiencies,  bad  debts,  defalcations, 
etc.,  then  the  members  know  that  they  have  taken  all 
necessary  precautions  to  protect  and  to  conserve  their 
interests.  They  know  also  that  by  the  nrethods  the 
officers  have  adopted  and  by  the  system  of  auditing 
which  has  been  inaugurated,  they  are  able  to  discover 
any  leakage  before  it  reaches  such  proportions  as  to 
endanger  their  money. 

As  remarked  in  another  place,  a  practical  system 
of  auditing  is  indispensable  when  the  affairs  of  an 
association  are  prosperous.  It  is  all  the  more  neces- 
sary when  this  is  not  the  case.  Any  lack  of  prosperity 
is  thus  discovered  promptly,  and  immediate  steps  may 
be  taken  to  improve  the  situation,  if  this  be  possible. 
If  this  cannot  be  done,  members  will  know  what  to 
expect,  and  will  not  be  disappointed  at  low  dividends 
or  no  dividends.  If  the  situation  is  so  bad  as  to  make 
it  necessary,  arrangements  may  be  made  to  wind  up 
the  affairs  of  the  association  before  they  reach  such  a 
condition  as  to  involve  seriously  the  interests  of  the 
members. 

Occasionally  an  association  is  allowed  to  drag 
along  feebly  after  it  has  become  apparent  that  it  is  not 
prospering,  until  it  reaches  a  condition  when  it  is 
impossible  to  wind  it  up  without  serious  loss.  Such 


164  MANUAL  FOR 

a  case  may  arise  from  outside  circumstances,  local  or 
otherwise,  as  well  as  from  mismanagement  or  in- 
attention on  the  part  of  the  officers.  Many  circum- 
stances, as  the  removal  of  factories,  the  depreciation 
of  real  estate,  and  other  such  things,  may  change  the 
conditions  under  which  an  association  was  established. 
It  is  always  best  to  know  the  worst  at  once  and  to 
act  accordingly.  When  losses  accumulate  until  a 
crash  comes,  it  is  nearly  always  found  that  the  assets 
are  less  in  value  than  they  are  supposed  to  be.  In 
addition,  the  cost  of  winding  up  is  so  greatly  increased 
that  this  of  itself  very  materially  reduces  the  assets. 
This  is  a  condition  that  should  never  be  permitted  to 
arise,  and  one  that  is  practically  impossible  under  any 
proper  system  of  auditing. 

STATUTORY  AND  CONSTITUTIONAL  REQUIREMENTS. 

The  business  of  building  associations  has  grown 
to  such  proportions  that  it  has  become  one  of  the 
important  factors  in  the  financial  transactions  of  the 
country.  In  few  other  connections  are  the  personal 
property  interests  of  a  larger  number  of  citizens  in- 
volved. There  is  this  other  consideration  also,  that 
the  number  of  citizens  who  entrust  their  savings  to 
the  care  of  associations  is  likely  to  continue  to  increase 
at  a  very  rapid  rate,  and  probably  in  the  near  future 
will  reach  an  astonishing  aggregate.  Very  properly 
therefore,  the  legislatures  in  the  different  states  give 
the  subject  attention  from  time  to  time,  and  provide 
by  statute  the  limitations  and  the  methods  to  be 
observed  by  the  associations. 

These  corporations,  in  order  for  their  own  guidance, 
establish,  under  the  statutes  of  the  state,  certain  rules 


BUILDING  ASSOCIATIONS.  165 

and  regulations,  which  they  embody  in  their  con- 
stitutions and  by-laws.  These  rules  determine  the 
methods  and  the  restrictions  of  their  operations. 
Upon  the  faithful  observance  of  these  depend  the 
safety  and  the  prosperity  of  the  associations  and  the 
protection  of  the  deposits  made  by  shareholders. 

In  a  sense  therefore,  it  is  the  business  of  an  auditor 
to  inspect  as  well  as  to  audit.  Not  only  should  he 
compare  and  check  items,  verify  entries  and  footings, 
etc.,  and  test  all  the  details  of  the  accounting  and  the 
book-keeping,  but  he  should  inspect  the  methods 
upon  which  the  system  of  accounting  is  based,  and 
the  ends  it  aims  at,  and  should  satisfy  himself  that 
both  the  accounting  and  the  operations  of  the  associa- 
tions are  in  accordance  with  the  constitution  and  the 
by-laws,  and  farther  than  this,  that  the  rules  them- 
selves of  the  association  are  in  harmony  with  the 
statutes  of  the  state.  It  is  only  by  this  system  of  far- 
reaching  and  thorough  auditing  that  an  auditor  can 
render  a  faithful  report  to  those  who  have  trusted  for 
the  time  being,  to  his  guardianship  of  their  interests. 

ECONOMICAL,  LABOR-SAVING,  AND  SIMPLE  METHODS. 

People  desire  economy  and  simplicity  in  the  man- 
agement of  their  business.  They  do  not  want  an  un- 
necessary expenditure  of  money,  nor  a  cumbrous 
system  which  they  can  not  understand.  They  like  to 
see  economical  and  labor-saving  methods  adopted  in 
the  management  of  the  business  of  their  associations, 
and  all  superfluous  work  and  intricate  books  dis- 
pensed with.  They  like  to  have  accounts  in  such 
form  that  they  themselves  can  readily  understand 
them  and  thus  perceive  how  they  are  kept.  Experi- 


166  MANUAL  FOR 

ence  has  shown  that  the  weakness  of  many  associations 
which  have  failed  has  been  just  here.  There  was  a 
waste  of  money  in  the  manner  in  which  the  business 
was  conducted.  Much  unnecessary  work  was  required, 
and  the  system  followed  was  so  intricate  and  cumber- 
some that  it  was  not  readily  understood,  and  it  did 
not  give  a  plain  showing  of  the  affairs  of  the  associa- 
tion. Consequently,  an  association  would  become  in- 
volved before  its  real  condition  was  discovered. 

Proper  auditing,  by  those  expert  in  such  matters, 
would  quickly  detect  any  such  condition  as  this  and 
put  an  end  to  it. 

THE  BALANCE  SHEET. 

The  best  method  of  securing  this  condition  is  to 
have  thoroughly  efficient  auditors,  appointed  by  the 
state,  or  appointed  by  and  responsible  to,  the  stock- 
holders and  directors  of  the  association,  to  examine 
the  records,  and  to  report  to  them  the  manner  in 
which  accounts  have  been  kept,  to  verify  the  balance 
sheet,  and  to  be  able  to  state  that  in  this  the  secretary 
and  the  directors  have  shown  correctly  the  business 
for  the  period  covered,  and  that  it  is  a  true  exhibit  of 
the  condition  of  the  association  upon  the  date  of  its 
issue.  Such  a  statement  thus  verified  enables  the 
members  to  act  with  intelligence  and  confidence,  and 
also  gives  to  outsiders  who  may  wish  to  become  mem- 
bers, or  who  may  have  some  other  interest,  full  and 
trustworthy  information.  If  an  association  is  prosper- 
ous a  correct  balance  sheet  is  its  best  advertisement. 
If  it  is  not  prosperous  the  balance  sheet  should  all  the 
more  demonstrate  the  fact  in  order  that  the  members 
may  be  fully  warned. 


BUILDING  ASSOCIATIONS.  167 

In  this  connection  it  may  be  remarked  in  passing 
that  such  methods  of  book-keeping  have  now  been 
devised  for  associations  that  the  secretary's  accounts 
may  exhibit  a  continuous  balance  sheet,  showing  at 
any  moment  the  exact  condition  of  the  association's 
business. 

THE  AUDITOR  THE  REPRESENTATIVE  OF  THE  MEMBERS. 

The  first  point  to  make  distinct  is  that  an  auditor 
does  his  work  in  the  interest  of  the  members  as 
contra-distinguished  from  the  officers  of  an  associa- 
tion, and  is  their  representative.  He  knows  nothing 
of  and  cares  nothing,  for  the  time  being,  for  the  offi- 
cers whose  accounts  he  is  examining.  He  is  ap- 
pointed for  the  purpose  of  ascertaining  on  behalf  of 
the  stockholders  that  their  money  has  been  properly 
accounted  for,  that  such  of  the  funds  as  have  been  ex- 
pended have  been  applied  in  the  manner  intended  and 
as  indicated  in  the  accounts,  and  that  the  unexpended 
portion  is  invested  or  held  as  intended,  and  that  this 
is  shown  in  the  report  and  the  balance  sheet.  In  a 
general  way  he  is  to  give  to  the  co-partners  or  share- 
holders his  assurance  that  the  transactions  of  the  offi- 
cers and  the  directors  in  the  management  of  the  busi- 
ness of  the  association  has  been  wise  and  discreet, 
and  according  to  the  rules  and  the  purposes  of  the  asso- 
ciation, and  that  the  report  and  the  statement  which 
they  present  correctly  and  accurately  represent  the 
actual  transactions  and  condition  of  the  association, 
and  that  it  may  be  relied  upon  as  showing  the  real 
result  of  their  management,  that  the  balance  sheet 
presents  the  actual  receipts  and  expenditures,  costs 
and  gains,  and  liabilities  and  assets,  for  the  term  it 
covers. 


168  MANUAL  FOR 

For  the  time  being  the  auditor  is  the  critic,  the 
judge,  of  the  officers, — their  friend  and  ally  if  their 
accounts  are  correct  and  their  conduct  right,  their  un- 
compromising antagonist  if  they  are  guilty  of  any 
shortcoming  or  wrongdoing. 

THE  SELECTION  OF  AN  AUDITING  COMMITTEE. 

Determining  who  shall  be  the  auditor  or  auditing 
committee  is  a  very  important  matter.  In  most  asso- 
ciations, that  is  to  say  in  associations  that  have  not 
long  been  organized,  the  auditors  are  usually  three  or 
five  members  selected  by  the  membership  at  large,  or 
by  the  directors,  for  this  purpose.  In  the  older  asso- 
ciations, and  in  not  a  few  of  the  younger  ones,  a  single 
auditor  is  chosen  who,  as  a  rule,  is  a  professional 
accountant,  and  may  or  may  not  be  a  member.  Other 
things  being  equal,  it  is  better  that  he  should  not  be  a 
member  of  the  association,  since  thus  he  may  be 
supposed  to  be  wholly  disinterested.  It  will  be  for 
each  association  to  determine  for  itself  whether  the 
auditing  shall  be  by  a  committee  of  members  or  by 
the  employment  of  a  special  auditor  or  professional 
accountant.  It  seems  altogether  likely  that,  as  the 
building  association  system  shall  have  farther  develop- 
ment and  shall  become  more  carefully  formulated,  as 
a  result  of  experience  an  improved  system  of  auditing 
will  come  into  general  use.  The  auditing  then  doubt- 
less in  nearly  every  case  will  be  done  by  a  special 
auditor, — possibly  one  appointed  by,  and  acting  under 
state  authority. 

QUALIFICATIONS  FOR  AUDITING. 

Whether  the  audit  be  by  a  single  individual,  or  by 
a  committee,  the  qualifications  must  be  the  same.  If 


BUILDING  ASSOCIATIONS.  169 

by  an  individual,  he  must  possess  all  the  qualifications 
himself;  if  by  a  committee,  one  member  may  be 
versed  in  one  part  of  their  work,  and  another  skilled 
in  some  other  department.  For  convenience  in  pre- 
senting the  subject,  and  in  order  to  make  it  a  little 
more  pointed  and  specific,  we  will  treat  the  auditor  in 
the  singular  number,  and  will  speak  of  the  qualifica- 
tions necessary  to  any  individual  who  should  be  re- 
garded as  competent  for  such  a  task. 

The  auditor's  duties  begin  immediately  with  the 
books  and  the  accounts  of  an  association.  These  must 
be  placed  in  his  hands,  posted  and  balanced  up  to  date, 
including  the  last  meeting  for  the  term  over  which 
his  duty  is  to  extend.  The  mistake  should  not  be 
made  that  he  is  to  take  the  books  and  accounts  of  an 
association  and  put  them  into  proper  shape,  if  he  does 
not  find  them  so.  He  has  nothing  to  do  with  this, 
unless  he  is  employed  to  correct  as  well  as  to  audit 
the  books.  He  is  to  take  them  just  as  he  finds  them 
and  to  report  upon  them  as  they  are.  While  an 
auditor  must  be  a  book-keeper,  auditing  is  not  book- 
keeping. How  frequently  it  happens  that  an  audit- 
ing committee  sets  to  work  to  straighten  up  the 
books  and  the  accounts  of  an  association  preliminary 
to  their  auditing  and  checking.  Keeping  the  ac- 
counts belongs  wholly  to  the  officers  of  the  associa- 
tion, and  it  is  the  business  of  the  auditor  to  report 
upon  things  exactly  as  he  finds  them  without  mend- 
ing or  altering  them  in  any  way.  He  is  the  represen- 
tative of  the  shareholders  and  membership  at  large, 
and  not  an  assistant  of  the  secretary  and  other  offi- 
cers. It  is  his  business  to  criticise  and  find  fault — 
if  criticism  is  warranted — with  the  work  of  the  secre- 


170  MANUAL  FOR 

tary  and  the  officers  as  shown  in  their  books  and 
reports,  and  not  to  correct  and "  cover  up  their  faults 
and  shortcomings. 

Not  only  must  an  auditor  have  a  thorough  knowl- 
edge of  accounts  generally,  but  he  must  be  an  expert 
in  association  accounts.  The  first  principles  of 
accounting  are  the  same  always  and  everywhere ;  but 
in  each  particular  line  of  business  the  application  of  the 
first  principles  must  vary.  Consequently,  one  may  be 
an  expert  bank  accountant  but  not  posted  in  insurance 
accounting,  or  in  manufacturing  or  in  merchandising. 
Building  association  accounts  have  their  own  distinct 
peculiarities,  and  present  certain  features  of  accounting 
not  found  in  other  lines  of  business.  The  best  auditor 
of  building  association  accounts  therefore  must  be  a 
specialist  in  this  particular  line. 

Again,  there  is  progress  in  the  science  and  art  of 
accounting  as  in  all  other  sciences  and  arts.  Methods 
formerly  in  general  use  are  now  discarded  for  those 
which  are  better.  In  every  line  of  business  labor- 
saving  systems  have  been  introduced  which  not  only 
make  economy  in  time  and  expense  possible,  but  also 
greatly  simplify  the  plans  and  make  the  results  more 
readily  attainable  and  comprehensible.  There  are 
many  devices  now  in  common  use  which  facilitate  and 
expedite  the  work  of  an  accountant.  An  auditor 
should  not  be  an  old  fogy.  He  should  be  up  with  the 
the  times  and  have  a  full  knowledge  of  modern 
methods  and  improvements  and  all  labor  and  time- 
saving  devices.  He  should  have  a  quick  grasp  of 
things,  so  that  he  can  see  at  once  the  correlation  of 
all  the  affairs  of  the  association,  and  also  the  relations 
which  each  separate  account  or  item  bears  to  the 
whole. 


B  UILDING  ASSOCIA  TIONS.  171 

Not  only  must  he  be  an  expert  accountant,  but  he 
must  understand  the  philosophy  and  the  principles  of 
the  line  of  business  with  which  he  is  dealing.  A 
building  association  is  the  application  of  the  principles 
of  co-operation  to  business  matters.  The  business  of 
an  association  differs  from  that  of  an  individual,  or  of 
an  ordinary  business  firm,  in  the  fact  that  the  private 
interests  of  so  many  more  individuals  are  involved. 
This  introduces  the  elements  or  principles  of  co-oper- 
ation. In  order  to  see  that  these  are  correctly  applied 
and  carried  out  it  is  necessary  that  the  auditor  shall 
himself  be  well  informed  in  regard  to  the  principles 
which  underlie  co-operation  in  general,  and  co-oper- 
ation in  this  special  direction,  in  particular. 

It  hardly  seems  necessary  to  say  that  an  auditor 
must  be  honest  and  incorruptible.  His  intentions 
and  purposes  must  be  absolutely  correct  on  the  one 
hand,  and,  on  the  other,  he  must  not  be  susceptible  to 
any  kind  of  influence  that  might  lead  him  away  from 
such  purposes.  Any  such  influence  as  deliberate  at- 
tempts at  bribery  are  hardly  to  be  expected  in  such 
an  institution  as  a  building  association,  but  there 
might  be  the  influences  of  friendship,  or  sympathy,  or 
something  of  that  kind,  which  would  tend  to  swerve 
an  auditor  from  a  straight  line.  These  must  be 
guarded  against,  not  only  on  the  part  of  the  members 
in  the  selection  of  the  auditor,  but  on  the  part  of  the 
auditor  himself,  in  the  prosecution  of  his  work. 

An  auditor  must  be  courageous  and  firm.  He 
may  find  himself  antagonized  and  opposed.  He  may 
find  opposition  where  he  expected  co-operation.  He 
may  find  weakness  where  he  expected  strength.  He 
may  be  placed  under  a  variety  of  circumstances  which 


172  MANUAL  FOR 

make  it  difficult  for  him  faithfully  to  prosecute  his 
work.  His  courage  and  firmness  must  never  fail. 

He  must  be  a  discreet  man,  one  capable  of  keeping 
his  own  counsel,  going  his  own  way,  minding  his  own 
business,  and  reaching  his  own  conclusions. 

He  must  be  a  man  of  tact  and  courtesy,  having  the 
faculty  of  finding  out  what  he  wants  to  know,  of  win- 
ning the  esteem  and  confidence  of  those  with  whom 
he  is  brought  into  contact,  and  of  commanding  the 
respect  even  of  those  whose  shortcomings  or  faults  he 
may  be  called  upon  to  expose. 

Withal  he  must  be  a  man  of  moderation  and  for- 
bearance, not  hasty  to  reach  conclusions,  not  disposed 
to  take  any  improper  advantage  of  his  position  or 
knowledge,  and  not  inclined  to  be  dictatorial  or  over- 
bearing in  his  manners  in  any  respect. 

DISQUALIFICATION  OF  AUDITORS. 

That  a  proper  system  of  auditing  goes  far  to  estab- 
lish confidence  in  an  association  has  been  proven  be- 
yond doubt.  The  shareholders  should  bear  in  mind 
that  it  lies  in  their  power  to  increase  the  advantages 
of  auditing  to  the  maximum  by  a  judicious  selection 
of  auditors  and  the  adoption  of  the  best  methods  as  to 
the  time,  manner,  frequency,  etc.,  of  making  the 
audits.  A  man  may  be  a  good  penman  or  copyist,  or 
may  be  reliable  in  the  addition  of  columns  of  figures, 
or  in  multiplication,  etc.,  he  may  be  successful  as  a 
mechanical  or  routine  book-keeper,  and  still  be  wholly 
incompetent  as  an  auditor.  To  be  capable  of  making 
an  audit,  he  must  have  a  thorough  comprehension  of 
what  the  figures  and  the  items  he  has  to  inspect  mean, 
and  must  understand  their  philosophical,  as  well  as 


BUILDING  ASSOCIATIONS.  173 

their  mathematical  relations.  A  scheming  official 
might  easily  keep  a  book-keeper's  clerk  or  assistant  in 
a  good  humor  with  himself  by  giving  him  plenty  of 
mechanical  work  to  do,  checking  this  and  that,  adding 
here,  subtracting  there,  and  multiplying  yonder,  all  of 
which  would  lead  to  nothing  at  all,  but  would  leave 
the  auditor  (?)  with  the  impression  that  he  was  mak- 
ing a  very  thorough  audit.  By  thus  flattering  his 
vanity,  and  enabling  him  to  make  a  great  show  of  his 
work,  he  could  be  effectually  thrown  off  of  any  danger- 
ous scent,  and,  while  industriously  calling  off  and 
checking  items  and  details,  the  foot-prints  of  fraud 
could  be  entirely  covered  up.  Indeed,  he  might  in 
this  way  handle  the  very  item  which  covers  or  omits 
fraudulent  transactions.  He  would  be  so  taken  up 
with  the  mechanical  part  of  his  work  that  he  would 
never  discover  anything. 

ASSISTANCE  FROM  OFFICIALS. 

An  auditor  who  can  not  audit  without  the  assist- 
ance of  the  secretary  is  not  the  man  for  the  place.  It 
is  not  an  uncommon  occurrence  to  see  a  secretary 
busily  engaged  in  assisting  an  auditor  by  reading  out 
from  pencil  memoranda  in  his  ledger  the  amounts 
which  are  to  be  checked  in  the  pass-books,  and  then 
these  pencil  figures  on  the  ledger  are  erased  before 
the  ledger  is  presented  to  the  auditor  for  other  pur- 
poses. An  auditor  who  must  be  assisted  is  one  to  be 
avoided. 

After  the  books  have  been  placed  in  his  hands  and 
explanations  have  been  made  of  the  system  which  is 
followed,  and  matters  have  thus  been  formally  turned 
over  to  him,  an  auditor  should  take  full  charge  and 
set  about  his  work  without  the  presence  of  any  of  the 


174  MANUAL  FOR 

officials  unless  he  shall  summon  them  to  answer  ques- 
tions, or  to  make  necessary  explanations.  If  he  finds 
new  features  in  book-keeping  in  vogue  with  which  he 
is  not  familiar  he  should  frankly  say  so,  and  ask  ques- 
tions freely  until  he  understands  the  system.  He 
can  not  make  his  audit  without  having  this  knowl- 
edge, and  it  is  due  to  the  officials,  to  the  shareholders 
whose  interest  he  represents,  and  to  himself,  that  he 
secure  the. information.  This  having  been  secured,  he 
is  then  able  to  understand  everything  clearly,  and  to 
report  upon  it  correctly,  and  should  proceed  to  do  his 
own  work  in  his  own  way. 

CHANGE  OF  AUDITORS. 

It  may  be  desirable,  as  a  precaution,  or  for  other 
reasons,  to  make  a  change  of  auditors  from  time  to 
time;  but  no  change  should  be  made  for  the  mere 
sake  of  a  change.  An  auditor  who  has  once  gone  over 
the  accounts  of  an  association  has  acquired  a  familiar- 
ity with  them,  that  is  to  say  a  special  knowledge  of 
them,  which  would  be  valuable  to  him  in  making  a 
second  audit.  If  he  is  efficient  and  satisfactory,  and 
there  is  no  special  reason  for  making  a  change,  it  will 
be  desirable  to  continue  him  in  the  position.  If  the 
books  are  audited  by  a  committee  it  will  be  easy  to 
keep  an  old  hand  in  the  lead  with  new  assistants  from 
lime  to  time.  There  is  often  a  risk  in  placing  the 
matter  of  auditing  in  new  hands  from  the  fact  that  it 
may  not  be  possible  to  know  with  certainty  that  the 
new  hands  are  competent  ones.  On  this  account  it  is 
better  never,  if  it  can  be  avoided,  to  place  an  audit  in 
wholly  untried  hands.  There  may  be  natural  inca- 
pacity, or  a  lack  of  training,  which  will  make  the 
work  unreliable  and  unsatisfactory. 


BUILDING  ASSOCIATIONS.  175 

COMPENSATION  OF  AUDITORS. 

There  is  no  more  important  work  to  be  done  for 
an  association  than  the  auditor's.  In  order  that  it  may 
be  done  properly  the  very  best  talent  available  should 
be  obtained  for  it.  It  is  very  poor  policy  for  share- 
holders to  seek  the  cheapest  auditors.  One  employed 
for  this  purpose  should  be  made  to  feel  that  he  is  well 
paid  for  his  services.  Being  free  and  satisfied  on  this 
score,  he  is  thereby  inspired  to  more  faithful  service 
than  he  might  otherwise  render.  It  is  especially  un- 
fair for  shareholders  to  expect  any  of  their  fellow- 
members  to  give  their  expert  knowledge  and  their 
time  to  this  painstaking  and  laborious  work  without 
fair  remuneration.  In  estimating  the  value  of  an 
auditor's  service  it  is  not  so  much  the  amount  of  time 
that  he  gives  to  it  that  should  be  considered, — al- 
though this  should  not  be  ignored, — as  the  fact  that 
his  work  is  in  the  nature  of  professional  services,  and 
should  be  paid  for  according  to  its  professional  value. 


CHAPTER  XV. 


AUDITING:  ITS  METHODS. 


UNIFORMITY  IMPOSSIBLE. 

In  the  preceding  chapter  the  subject  of  auditing 
has  been  discussed  in  reference  to  its  general  prin- 
ciples and  features.  But,  in  order  that  the  suggestions 
of  this  work  may  be  made  of  as  much  practical  value 
as  possible,  it  is  necessary  to  indicate,  as  far  as  may  be, 
how  these  principles  are  to  be  applied  in  practice. 
Bvery  one  will  understand  that  it  is  impossible  to  lay 
down  a  set  of  specific  rules  which  will  apply  in  all 
cases.  It  is  only  the  application  of  the  principles  of 
auditing  in  a  general  way  that  can  be  pointed  out  here. 
These  must  be  adapted  to  circumstances  as  they  may 
be  found  to  exist  wherever  they  come  to  be  specifically 
applied.  Kven  in  any  one  particular  association,  circum- 
stances differ  from  time  to  time  as  new  contingencies 
arise.  Consequently  there  must  be  more  or  less  varia- 
tion in  the  application  of  any  set  of  rules.  While  the 
rules  and  suggestions  which  follow  are  given  in  out- 
line, the  endeavor  has  been  made  to  make  them  suffi- 
ciently comprehensive  to  cover  almost  any  set  of 
circumstances  that  may  arise  in  the  practical  operations 
of  an  association. 


MANUAL  FOR  BUILDING  ASSOCIATIONS.    177 

CARE  OF  BOOKS. 

An  auditor  should  notice  whether  or  not  the  books 
of  an  association  are  well  cared  for.  He  should  see 
where  they  are  kept  and  how  they  are  handled,  should 
notice  whether  or  not  they  are  in  good  condition,  and 
are  clean.  He,  himself,  in  turn  should  handle  them 
carefully,  keeping  them  neat  and  clean,  and  placing 
upon  them  only  the  necessary  check  marks,  and  should 
make  these  as  small  and  as  neat  as  possible.  Auditors 
will  find  that  books  which  are  neat  and  clean  in 
appearance,  in  which  the  entries  are  tastefully  made, 
balances  properly  ruled  off,  etc.,  will  as  a  rule  contain 
accounts  that  are  correctly  kept.  Where  the  condition 
of  the  books  is  such  as  to  indicate  carelessness  in  their 
handling,  an  auditor  may  well  expect  to  find  careless- 
ness in  the  accounts  themselves,  for,  careless  in 
one  thing  careless  in  all  things,  may  be  expected 
to  be  the  rule.  If  the  secretary  or  other  officer  is 
neglectful  of  his  duties,  or  has  erasures  and  finger- 
marks all  through  his  books,  he  is  likely  to  have 
errors,  both  of  omission  and  commission,  in  his  entries. 

SPECIAL  HINTS. 

A  list  of  the  books  in  use  having  been  furnished  to 
the  auditor  he  should  make  it  his  first  business  to  see 
that  it  is  complete,  and  that  all  the  books  named  in  it 
are  in  his  hands.  He  should  next  turn  his  attention 
to  the  general  features  and  conditions  of  the  books 
themselves.  He  should  see  whether  they  constitute  a 
perfect  system  without  any  break,  that  is,  whether  the 
books  are  like  the  different  parts  of  a  machine,  each 
wheel  fitting  properly  into  the  others,  and  no  wheel 
absent.  He  should  examine  each  book  and  note  all 


178  MANUAL  FOR 

the  particulars  concerning  it.  For  instance,  he  should 
see  if  the  books  are  machine-paged,  since  this  is  one 
of  the  most  efficient  safeguards  against  tampering, 
such  as  cutting  out  or  pasting  together  of  leaves,  and 
so  on,  and  is  a  most  important  feature  in  the  tracing 
of  entries.  All  books  which  in  any  way  have  con- 
nection with  financial  transactions  in  the  receipt  or 
expenditure  of  money  should  be  numbered  in  con- 
secutive pages  by  a  machine.  They  should  begin  with 
page  i,  and  should  continue  in  regular  numerical 
order.  It  sometimes  happens  that  books  become  very 
large,  and  the  page  numbers  become  too  large  for  con- 
venience in  practical  work.  Various  expedients  may 
be  resorted  to  in  such  cases.  The  first  series  of  pages 
may  run  up  to  1000.  Then  a  new  series  may  begin 
which  will  be  called  A,  as  A  i,  A  2,  A  3,  and  so  on, 
while  a  third  series  may  be  B  i,  B  2,  B  3,  and  so  on. 

Attention  should  be  given  next  to  the  clerical 
work  in  the  books  to  see  whether  all  entries  have  been 
made,  whether  they  are  clear  and  legible,  and  whether 
the  extensions  and  footings  have  been  carried  out. 
If  omissions  are  discovered  the  attention  of  the  officers 
should  be  called  to  them,  and  the  officers  themselves 
should  fill  them  up.  If  entries  are  found  which  are 
not  in  due  form,  but  are  in  the  nature  of  memoranda, 
this  should  be  noted,  and,  if  necessary,  the  officials 
should  be  called  upon  to  complete  their  work.  If  any 
entries  are  made  in  pencil,  or  footings  appear  in  pencil, 
the  pencil  work  should  not  be  accepted,  because,  after 
the  audit  is  completed,  such  entries  could  be  easily 
changed.  The  original  rulings  of  the  books,  and  also 
all  rulings  made  in  the  course  of  the  accounts  should 
be  noted.  If  these  rulings  do  not  fulfill  their  purpose 


BUILDING  ASSOCIATIONS.  179 

clearly  the  fact  should  be  noted  and  the  matter  should 
be  properly  cleared  up. 

These  preliminary  matters  having  been  noted,  the 
auditor  should  next  turn  his  attention  to  the  particular 
accounts.  He  should  first  notice  the  method,  or  modus 
operandi,  upon  which  the  accounts  are  kept.  He  then 
should  test  the  different  accounts  by  taking  certain 
items  and  tracing  them  from  book  to  book  so  as  to 
obtain  a  clear  knowledge  of  the  process  by  which  the 
accounts  are  made  up. 

As  the  auditor  proceeds  with  his  work  various  inci- 
dental matters  will  continually  arise  to  claim  his  atten- 
tion. He  must  be  prepared  by  intelligence  and 
experience  to  look-  out  for  these  himself.  They  can 
not  be  specifically  scheduled.  A  few  such  matters 
may  be  mentioned  particularly  by  way  of  suggestion : 

He  should  see  that  no  dividends  have  been  de- 
clared out  of  the  capital,  or  out  of  earnings  which  have 
not  yet  been  realized. 

He  should  see  whether  or  not  any  capital  has  been 
invested  in  securities  that  are  illegal  or  improper,  and 
false  assets  shown  in  this  way. 

He  should  inquire  as  to  whether  the  constitution 
and  the  rules  have  been  followed  in  all  matters  relating 
to  the  accounts,  and,  if  the  directors  are  empowered 
with  authority  to  use  their  discretion  in  any  official 
transactions,  whether  or  not  their  resolutions  and  in- 
structions have  been  carried  out  to  the  letter. 

He  should  see  that  rebates  in  interest  are  allowed 
correctly,  and  all  incidental  items  are  properly  entered 
and  considered. 

He  should  examine  carefully  the  profit  and  loss 
account,  inspecting  and  verifying  each  item.  He 


i8o  MANUAL  FOR 

should  see,  for  instance,  that  any  provision  in  the  rules 
permitting  allowance  for  depreciation  in  the  value  of 
fixtures,  stationery,  etc.,  has  been  followed,  and  that 
such  entries  are  properly  made. 

Kvery  auditor  should  have  a  system  of  check 
marks  of  his  own.  These  should  be  made  with  ink  or 
an  ink  pencil.  They  may  be  in  different  colors  and 
in  different  forms  as  he  may  find  necessary  for  the  per- 
fection of  his  work.  By  putting  his  proper  check  on 
each  item  as  he  passes  upon  it  he  will  not  fall  into  con- 
fusion, and  each  item  will  tell  its  own  story  as  soon  as 
he  looks  at  it.  He  will  also  know  in  this  way  when 
his  work  is  completed,  and  his  check  marks  will 
remain  for  the  information  and  guidance  of  himself  or 
others  in  making  future  audits. 

FALSE  ACCOUNTS. 

It  is  the  auditor's  business  to  detect  mistakes  and 
misrepresentations.  Mistakes  occur  through  ineffi- 
ciency or  carelessness.  Misrepresentations  arise  from 
an  intention  to  deceive.  Mistakes  may  be  rectified  ; 
misrepresentations  must  be  exposed.  In  case  there- 
fore, the  secretary  or  the  board  of  directors  have  inten- 
tionally prepared  and  submitted  a  false  statement,  the 
auditor  may  have  a  more  or  less  unpleasant  and  some- 
times difficult  task  before  him.  If  he  is  efficient,  he 
will  soon  be  able  to  detect  the  fact  that  the  account  is 
incorrect.  If  it  has  been  made  so  intentionally,  he  will 
soon  discover  this  also.  Being  properly  put  upon  his 
guard  by  his  discovery,  he  will  need  to  summon  all 
his  tact  and  firmness,  and  settle  down  to  a  faithful  and 
thorough  investigation.  He  must  now  prepare  him- 
self not  only  to  point  out  the  errors  in  the  account, 


BUILDING  ASSOCIATIONS.  181 

but  also  to  expose  the  purpose  and  method  of  the 
errors.  It  will  always  be  well  for  an  auditor  under 
such  circumstances  to  be  cool,  deliberate,  and  close- 
mouthed.  He  should  not  be  hasty  to  betray  his  sus- 
picions. There  should  be  nothing  in  his  manner,  or 
speech,  or  actions,  to  indicate  that  suspicions  have 
been  aroused,  until  the  proper  time  comes  for  him  to 
take  decisive  action.  He  should  fortify  himself  with 
all  the  evidence  available,  so  that  his  position  may  be 
impregnable,  and  that,  when  exposure  comes,  it  may 
be  thorough  and  complete,  and  the  guilty  officials  may 
be  brought  to  such  punishment  or  restitution  as  may 
be  due. 

ERRORS  OF  OMISSION. 

It  is  difficult  to  lay  down  any  rule  by  which  errors 
of  this  kind  can  be  detected  with  absolute  certainty. 
Bvery  thing  will  depend  upon  the  intelligence,  the 
experience,  and  the  determination  of  the  auditor.  An 
audit  may  be  thorough  and  correct  as  far  as  direct 
cash  transactions  are  concerned,  but  may  be  incom- 
plete in  the  statement  of  assets  and  liabilities.  To  guard 
against  errors  of  omission  in  any  part  of  the  accounts, 
each  item  should  be  checked  as  far  as  possible  from 
original  entries  or  sources  in  order  to  see  that  the 
association  has  been  charged  with  all  cash  received 
and  liabilities  incurred.  The  same  course  must  be 
pursued  on  the  other  hand  with  reference  to  all  cash 
expenditures  and  to  all  credits.  It  sometimes  happens 
that  the  affairs  of  associations  become  complicated  and 
the  interests  of  stockholders  seriously  endangered 
without  warning,  because  officials  have  been  careless 
in  their  accounts  in  these  respects,  and  auditors  have 


i82  MANUAL  FOR 

been  incompetent  or  negligent.  It  should  always  be 
borne  in  mind  that  an  auditor  is  one  who  audits,  and 
if  he  fails  in  any  particular  then  he  is  not  entitled  to 
the  official  name  which  he  bears. 

GENERAL  OUTLINE. 

The  accompanying  diagram  illustrates  the  posting 
of  different  items  from  book  to  book  until  each  reaches 
its  final  account.  In  this  graphic  way  the  entire  sys- 
tem of  building  association  accounts  is  illustrated  at  a 
glance.  Since  an  auditor  must  follow  these  postings 
the  diagram  will  be  valuable  as  a  guide. 

1.  Check  all  extensions  and  footings  in  the  origi- 
nal books. 

2.  Compare  each  entry  in  No.  i,  Members'  Pass 
Book,  with   No.   2,  Contribution   Book,   and   No.  4, 
Members'  Ledger. 

3.  Compare    each  entry   in   No.   3,   Withdrawal 
Book,  with  No.  4,  Members'  Ledger. 

4.  Compare  each   entry  in  No.   2,   Contribution 
Book,  with  No.  4,  Members'  Ledger. 

5.  Compare   each   entry   in  No.   2,   Contribution 
Book,  and  No.  3,  Withdrawal  Book,  with  No.  5,  Cash 
Book. 

6.  Compare  No.  7,  Treasurer's  Receipt  Book,  with 
No.  2,  Contribution  Book,  and  also  with  No.  8,  Treas- 
urer's Cash  Book,  and  with  No.  3,  Withdrawal  Book. 

7.  Compare  totals  of  No.  5,  Cash  Book,  with  totals 
in  No.  6,  General  Ledger. 

SHARE  CONTRIBUTIONS. 

A  few  suggestions  may  be  made  as  to  the  proper 
method  of  checking  up  the  dues  paid  in  by  the  share- 
holders : 


BUILDING  ASSOCIATIONS. 

DIAGRAM  L 


183 


Receipts. 


@ 

Treasurer's 

Receipt 


© 

INDIVIDUAL, 

SHARE  HOLDER'S 

LEDGER. 


Withdrawal 

Book 

or 

Order  Book. 


~3 
CASH 

^~ 
BOOK. 

•'9 

i 

\ 

< 

~~3 

3EXERAL 

\ 
LEIXiER. 

Treasurer's 
Cash. 


i84  MANUAL  FOR 

1.  The  members'  pass-books  should  be  examined, 
to  see  that  each  has  been  issued  only  after  the  member 
has  complied  with  the  rules  for  admission,  whatever 
they  may  be,  paid  all  necessary  fees,  etc. 

2.  Pass-book  entries  of  dues,  fines,  etc.,  should  be 
checked  up  as  to  amounts  and  dates. 

3.  The  accounts  in  the  Members'  Ledger  should 
be  checked  against  the  pass-book  entries  to  see  that  all 
items  have  been  properly  posted. 

4.  The  contributions  of  each  deposit  account  in 
the  Contribution  Book  should  be  added  across,  and  the 
totals  should  be  compared  with  the   corresponding 
entries  in  the  Cash  Book. 

There  is  such  a  variety  of  methods  under  which 
dues  are  received  and  recorded  that  it  is  difficult  to 
make  specific  suggestions  that  will  cover  all  cases. 
What  is  said  above  will  be  sufficient  to  put  an  intelli- 
gent auditor  upon  the  right  track. 

PROVING  OF  CASH  BALANCE. 

The  Cash  Balance  as  shown  in  the  Cash  Book, 
should  be  verified  by  the  cash  being  produced  and 
counted.  In  case  the  audit  does  not  take  place  until 
some  time  after  the  end  of  the  term,  the  cash  on  hand 
at  the  date  of  the  audit  should  be  counted,  and  a  state- 
ment should  be  prepared,  showing  receipts  and  ex- 
penditures since  the  close  of  the  term.  By  having 
arrangements  for  the  audit  prepared  previous  to  the 
close  of  the  term  this  last  expedient  will  not  be  neces- 
sary, and  an  element  of  uncertainty  will  be  removed, 
for,  of  course,  if  any  fraud  were  being  planned,  it 
would  be  possible  to  manipulate  the  cash  account,  after 
the  close  of  the  term  and  previous  to  the  date  of  audit, 
so  as  to  show  a  false  balance  when  the  term  closed. 


BUILDING  ASSOCIATIONS. 


185 


*o  'd 

Fines.  | 

^H       C3 

S^ 

Prem.         : 

CO 

Int. 

4-1     rj 

,3   3 
£     ° 

Dues.         :      : 
Fines.        :      : 

Prem.         :       :       : 

„  0    0> 
W    *"   1/3 

Int.         :      :      : 

Dues.          :       .       : 

0  j§    fl 

Fines.       :      :      : 

d  "*"* 

Prem.        :      :      : 

8*5  § 

int.         :     :      : 

111 

Dues.        :      : 
Fines.        :       :       T 

8  £$ 

Prem.        :      :      : 

w"  ^2  d 

int.         :      :      : 

Dues.        :      :     : 

8  &1  ° 

Fines.               :      : 

So^ 

Prem.                : 

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Int. 

Dues.              :      : 

v-  a;  rd 

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Prem.                :       : 

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Int.               :      : 

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Dues.                 :       : 

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Prem.         :       :       : 

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S^" 

Int.          :      :      : 

rt  "a 

Dues.        : 

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|   Book  |      :            : 

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|  Trans.         : 

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i 

:      : 

GRAND 
TOTAL. 

Fines.  | 

J 

3 

Prem. 

1 

Int. 

Dues. 
Fines.  | 

Prem. 

Int. 

Dues. 



Fines. 

Prem. 

Int. 

Dues. 
~Fines. 

===== 

Prem. 

Int. 

Dues. 

^ines 

Prem. 

Int. 

Dues. 
Fines. 

Prem. 

Int. 

== 

Dues. 
Fines. 

Prem. 

Int. 

Dues. 

186 


MANUAL  FOR 


IONTHLY  SECRETARY'S  BOOK. 
This  diagram  shows  a  form  for  rulings,  entries,  footings,  and  postings,  for  what  is  called 
1  2-month  Contribution  Book.  In  this  form  dues  are  paid  monthly  instead  of  weekly,  and  at 
le  end  of  the  year  are  footed  -across  in  each  account  and  then  posted. 

Fines.        :      :      : 

Prem. 

Int. 

Dues. 

Fines.         :       :       : 

Prem. 

Int. 

Dues. 

Fines.  |      :       :       : 

Prem. 

Int. 

Dues. 

Fines.        :      :      : 

Prem. 

Int. 

Dues. 

Fines.  1      :       :       : 

Prem. 

Int. 

Dues. 

Fines. 

Prem. 

Int. 

Dues. 

NAME. 

||    Book 

|Adm.& 
|  Trans. 

||  Shares  •       :              : 

\ 

1 

GRAND 
TOTAL. 

1 

:      :      : 

Fines. 

t-3 

«tj 

Prem. 

1 

Int. 

Dues. 

Fines. 

Prem. 

Int. 

Dues. 

Fines. 

Prem. 

Int. 

Dues. 

Fines. 

Prem. 

Int. 

Dues. 

Fines 

Prem. 

Int. 

Dues. 
Fines. 

Prem. 

Int. 

Dues. 

Fines. 

Prem. 

Int. 

Dues. 

BUILDING  ASSOCIATIONS.  187 

SECRETARY'S  CASH  BOOK. 

An  association  must  have  some  way  of  bringing 
all  its  accounts  together,  so  that  they  may  be  properly 
summarized  and  balanced.  This  is  done  through  the 
Cash  Book,  sometimes  called  the  Itemized  Cash  Book, 
or  Secretary's  Cash  Book. 

The  rule  of  debit  what  you  receive  and  credit  what 
you  pay  out,  holds  good  with  cash  only ;  whereas  in 
all  other  transactions  the  reverse  is  true.  The  bulk 
receipts  are  entered  in  their  respective  columns  of  the 
Cash  Book,  debiting  cash,  while  the  disbursements  are 
entered  in  their  respective  columns,  crediting  cash. 

The  method  of  checking  the  Cash  Book  is  illus- 
trated in  the  diagram  on  the  following  page. 

TREASURER'S  CASH  BOOK. 

The  treasurer  keeps  this  book  for  his  own  con- 
venience. In  it  he  enters  the  gross  receipts  of  each 
meeting  and  all  disbursements.  If  kept  posted  prop- 
erly it  shows  at  all  times  the  exact  amount  of  cash  on 
hand.  This  book  should  be  checked  against  the 
Treasurer's  Receipt  Book,  the  Warrant  Book,  and  the 
Bank  Book,  an  appropriate  check  sign  being  placed 
opposite  the  last  entries  in  each. 

MEMBERS'  LEDGER. 

In  checking  this  book  attention  must  be  given  to 
the  following  points : 

i.  The  account  of  each  shareholder  in  the  Ledger 
must  be  checked  by  comparison  with  the  entries  in 
his  Pass  Book.  A  sign  indicating  that  this  has  been 
done  should  be  placed  against  the  Ledger  entries,  and 
also  opposite  the  last  Pass  Book  entry. 


i88 


MANUAL  FOR 

DIAGRAM  CASH. 


B  UILDING  ASSOCIA  TIONS.  189 

2.  Items    posted    from    the    Contribution   Book 
should  be  checked  by  amount,  date,  and  folio,  and 
another    appropriate    check   sign    should    be   placed 
against  the  last  entries. 

3.  Withdrawal  items  should  be  checked  against 
the    Members'    Pass   Book,    Contribution    Book,    am1 
Warrant  Book. 

4.  The  Dividend  account  must  be  examined  to  se< 
that  all  dividends  due   to  each   member  have   bee.i 
properly  credited,  and,  if  drawn,  the  items  must  be 
checked  against  the  Warrant  Book. 

5.  All  miscellaneous  items,  such  as  assessments, 
rebates,  and  every  thing  of  that  character,  must  be 
checked  carefully  against  original  entries. 

WITHDRAWALS. 

Auditors  should  see  that  the  files  contain  properly 
signed  vouchers  from  withdrawing  members,  showing 
the  exact  amount  which  has  been  received.  The  sig- 
natures to  these  vouchers  should  be  compared  with 
those  entered  in  the  Constitution  Signature  Book,  if 
such  a  Book  is  kept ;  if  not,  he  must  verify  the  sig- 
nature to  his  own  satisfaction  in  some  other  way. 

In  checking  up  withdrawals,  he  should  note, — 

1 .  That  applications  for  money  have  been  entered 
in  the  Withdrawal  Book  in  regular  chronological  order 
and  that  they  have  been  acted  upon  in  this  order  1 
the  Directors. 

2.  That  all  warrants  for   the  payment  of  with 
drawals  correspond  with  the   dates   and   amounts  in 
Cash  Book. 

3.  That  partial  withdrawals  are  properly  noted  in 
the  Member's  Pass  Book ;    and,  if  the  withdrawal  is 


190  MANUAL  FOR 

complete  and  absolute,  that  the  Pass  Book  has  been 
surrendered,  and  the  fact  of  withdrawal  entered  therein. 
4.  That  amounts  paid  out  on  withdrawal  have 
been  charged  against  their  proper  accounts  in  the 
Members'  Ledger. 

GENERAL  LEDGER. 

This  is  a  very  important  book  in  connection  with 
the  accounts  of  the  association.  In  it  are  summarized 
the  details  of  all  the  other  books.  By  it  the  correct- 
ness of  all  the  other  accounts  is  to  be  finally  tested. 
From  it  the  Balance  Sheet  is  made  up.  It  tests  the 
actual  condition  of  the  association's  business,  indicat- 
ing the  assets  and  the  liabilities,  the  profits  and  the 
losses.  As  implied  in  its  name,  the  accounts  of  this 
Ledger  are  the  opposite  of  the  individual  accounts  in 
the  Members'  Ledger.  Herein  is  applied  the  double 
entry  principle  in  book-keeping.  Every  debit  must 
have  a  credit,  and  vice  versa. 

The  old  system  of  journalizing  is  now  generally 
discarded,  since  it  involves  a  great  deal  of  unnecessary 
labor.  Under  the  later  methods  each  item  is  entered 
immediately  to  its  appropriate  account,  or  is  posted 
from  the  books  of  original  entry,  without  passing 
through  the  Journal. 

Building  association  accounts  differ  from  mercan- 
tile accounts  in  that  the  transactions  are  wholly  finan- 
cial, and  are  uniform.  This  makes  possible  more 
simple  methods  of  book-keeping  in  certain  respects, 
though  the  accounts  are  very  intricate  on  account  of 
the  character  and  multiplicity  of  the  items.  But  the 
same  principle  of  debit  and  credit  must  still  lie  at  the 
foundation  of  the  system,  and  the  ultimate  result  of 


BUILDING  ASSOCIATIONS.  191 

book-keeping  must  show  the  total  assets  and  liabilities, 
and  the  profits  and  losses  correctly.  If  the  summarized 
items  under  these  heads  fail  to  balance,  then  there  is 
something  wrong  with  the  accounts. 

The  general  accounts  necessary  usually  are  the 
following,  and  as  a  rule  they  will  appear  in  the  Trial 
Balance  as  indicated : 

(Usually  CR.)  Usually  DR.) 

PASS  BOOKS,  EXPENSE, 

DUES,  SALARIES, 

FINES,  RENTS, 

PREMIUMS,  INSURANCE, 

INTEREST,  DIVIDENDS, 

ADMISSIONS,  SHORTAGES, 

TRANSFERS,  INTEREST. 

OVERS, 

RENTS, 

DIVIDENDS, 

SURPLUS. 

ASSETS  AND   LIABILITIES. 

The  assets  and  liabilities  may  have  some  such 
classification  as  follows : 

ASSETS.  LIABILITIES. 

Cash  on  hand,  Running  stock  and  dividends, 

Loans  on  mortgage  security,  Paid-up  stock  and  dividends, 

Loans  on  stock  security,  Deposits  and  interest, 

Furniture  and  fixtures,  Fund  for  contingent  losses, 

Real  estate,  Borrowed  money, 

Due  for  insurance  and  taxes,  Undivided  profits, 

Other  assets,  in  detail.  Other  liabilities,  in  detail. 

The  schedule  must  be  sufficiently  comprehensive 
in  its  details  to  include  every  thing,  and  the  audit 
must  be  so  conducted  as  to  trace  every  item  into  this 
schedule  so  that  each  summary  may  be  fully  verified. 


i92  MANUAL  FOR 

The  amount  by  which  the  assets  may  exceed  the 
liabilities  is  usually  called  the  Reserve  Fund. 

The  amount  by  which  the  liabilities  may  exceed 
the  assets  is  usually  called  Shortage  or  Deficiency. 

AUDITOR'S  REPORT  ON  SPECIAL  MATTERS. 

Where  every  thing  is  found  correct  and  in  good 
form  the  auditor's  regular  certificate  is  usually  about 
all  that  he  need  file  in  the  way  of  a  report.  In  some 
cases,  although  he  may  sign  the  regular  certificate, 
there  may  be  some  matters  to  which  he  may  deem  it 
necessary  to  call  the  attention  of  the  shareholders. 
In  deciding  as  to  whether  or  not  he  should  make  any 
report  on  such  special  matters,  or  should  make  any 
incidental  suggestions,  he  must  be  guided  by  what 
may  seem  to  him  to  be  necessary  for  the  welfare  of 
the  association.  A  few  illustrations  may  be  suggestive: 

The  auditor  may  differ  with  the  secretary  or  the 
directors  upon  some  matter  which  may  be  of  import- 
ance to  the  interests  of  the  association.  If  so,  he 
should  state  the  matter  plainly  so  that  it  may  be 
clearly  understood,  being  careful,  however,  not  to  be 
too  elaborate  and  therefore  tedious,  and  should  give 
illustrations  when  possible. 

He  might  find  that  the  secretary  or  other  officer 
was  underpaid  or  overworked,  and  might  think  it 
better  for  the  association  if  this  were  corrected. 

He  might  discover  that  the  officers  were  not 
afforded  proper  facilities  for  transacting  the  associa- 
tion's business  and  that  its  interests  were  in  con- 
sequence crippled  or  jeopardized,  and  could  make 
some  recommendation. 

He  might  find  that  the  system  for  filing  and  caring 


BUILDING  ASSOCIATIONS.  193 

for  mortgages,  insurance  policies,  notes,  and  other 
papers,  was  not  a  good  or  safe  one. 

Many  other  such  incidental  matters  might  claim 
his  attention. 

In  making  special  reports  on  any  miscellaneous 
matters  an  auditor  should  act  deliberately.  He  should 
be  careful  not  to  do  any  thing  which  might  be  used  to 
the  disadvantage  of  the  association  or  its  officers  by 
some  disgruntled  or  unwise  member,  or  some  officious 
or  antagonistic  outsider. 

In  any  case  where  he  finds  that  the  accounts  and 
records  are  grossly  inaccurate  and  incomplete,  either 
through  carelessness,  incompetency,  or  a  purpose  to 
deceive  on  the  part. of  the  officers,  his  duty  is  plain. 
He  must  not  only  withhold  his  certificate  but  must 
report  facts  as  he  finds  them  to  the  association. 

AUDITOR'S  CERTIFICATE. 

When  the  Auditor  has  completed  his  task,  if  he  has 
found  every  thing  correct,  he  should  prepare  and  sign 
a  certificate  in  some  such  form  as  follows : 

To  THE  SHAREHOLDERS  OF  THE 

BUILDING  AND  LOAN  COMPANY. 

I  have  carefully  examined  the  books,  vouchers,  cash,  and 
accounts  of  your  Association,  and  find  the  same  to  cor- 
respond with  the  Balance  Sheet  as  presented  under  date  of 

I  also  find  the  present 

condition    of  the   Association  to   be   correctly  presented  in 

said  Balance  Sheet. 

Respectfully, 

.,  Auditor. 


194  MANUAL  FOR 

SAFETY  INSURED. 

The  suggestions  here  made  are  sufficient  to  put  an 
inexperienced  auditor  on  his  guard,  and  also  to  indicate 
to  members  something  of  what  is  involved  in  an  audit, 
and  to  show  the  character  of  person  that  should  be 
appointed  as  auditor. 

If  auditing  were  always  faithful  and  efficient  it 
would  save  much  trouble,  anxiety,  and  loss  to  mem- 
bers. Even  if  the  account  is  correct,  or  if  there  are 
unintentional  errors  in  it,  it  is  only  regular  and  com- 
petent auditing  that  will  insure  permanent  confidence 
in  the  association  on  the  part  of  members  and  of  the 
public.  There  always  are  apt  to  be  a  few  members  at 
least,  and  not  a  few  outsiders,  who  look  upon  an  asso- 
ciation with  more  or  less  distrust.  If  such  as  these 
see  that  the  affairs  of  an  association  are  regularly  and 
systematically  investigated,  then  their  confidence 
sooner  or  later  becomes  established.  Under  such  a 
system  officials  would  soon  learn  that  it  was  impossible 
to  secure  the  auditor's  certificate  to  unreliable  and 
incorrect  accounts  and  statements,  and  shareholders 
would  understand  that  the  practice  of  any  fraud  upon 
them  would  be  impossible. 

By  the  adoption  of  some  such  system  of  auditing 
as  is  here  presented,  shareholders  make  such  provisions 
and  take  such  precautions  as  will  render  mistakes 
well-nigh  impossible.  They  have  delegated  authority 
to  two  representative  bodies,  each  of  which  acts  as  a 
check  upon  the  other.  The  board  of  directors  is  an 
administrative  body ;  the  auditor  or  auditors  constitute 
a  supervising  and  reviewing  department. 

The  directors  and  secretary  are  compelled  to  be 
watchful,  for  they  know  all  their  work  will  be  under 
critical  review. 


BUILDING  ASSOCIATIONS.  195 

The  auditor  must  prove  himself  competent  and  do 
Ms  work  faithfully,  or  his  inefficiency  will  be  apparent 
in  the  course  of  time. 

STATE  SUPERVISION. 

So  many  citizens  are  entrusting  their  earnings  to 
the  care  of  building  associations,  and  the  aggregate 
capital  they  accumulate  has  become  so  large,  that 
some  form  of  civil  supervision  has  become  a  necessity. 
Some  extreme  theorists  have  even  argued  that  this  is 
a  subject  for  national  control,  and  point  to  the  national 
banks  as  presenting  a  system  somewhat  analogous  to 
that  of  the  associations.  But  at  the  present  time,  at 
any  rate,  it  is  useless  to  speak  of  federal  supervision  of 
building  associations.  If  they  come  under  any  kind 
of  govermental  supervision  at  all,  it  must  be  from  the 
various  states. 

Some  states  have  already  provided  for  the  super- 
vision of  associations.  The  "Co-operative  Savings 
Fund  and  L,oan  Associations"  of  Massachusetts  are 
supervised  under  the  most  stringent  laws.  In  Ohio, 
the  Insurance  Commisioner  has  been  made  Supervisor 
of  Building  Associations,  and  the  subject  is  assigned  to 
a  separate  bureau  in  his  department  under  the  care  of 
a  special  deputy.  In  Minnesota,  and  a  number  of  other 
states,  building  association  bureaus  have  been  estab- 
lished as  departments  in  the  offices  of  the  commis- 
sioners of  banking,  insurance,  etc.  Owing  to  the 
formative  character  of  legislation  on  this  subject  it  is 
not  possible  to  present  a  comprehensive  summary  at 
this  time.  It  seems  safe  to  say  that  the  day  is  not  far 
distant  when  separate  departments  of  building  associa- 
tion inspection  must  be  established  in  all  those  states 
where  these  societies  are  now  so  rapidly  multiplying. 


196    MANUAL  FOR  BUILDING  ASSOCIATIONS. 

But  state  supervision,  so  far  as  it  has  yet  been 
developed,  does  not  remove  the  necessity  for  private 
auditing.  Indeed,  it  enforces  this  necessity,  and  this 
is  its  object.  The  state  supervisor  does  not  take  the 
place  of  the  regular  auditor.  He  makes  no  actual 
inspection  of  the  accounts  and  affairs  of  an  association 
except  in  emergencies.  The  time  may  come, — as  per- 
haps it  ought, — when  it  will  be  made  the  duty  of  the 
state  officials  to  make  personal  examination  of  the 
business  of  associations,  not  alone  at  regular  stated 
periods,  but  at  irregular  and  unexpected  times.  When 
this  shall  come  to  pass  we  may  expect  to  see  the  end 
of  such  careless  and  unbusiness-like  methods  as  are 
now  sometimes  witnessed,  and  to  hear  no  more  of 
shortages  and  defalcations. 


CHAPTER  XVI. 


DIVIDEND  AND   INTEREST  TABLES. 


CALCULATION  OF  DIVIDENDS  AND  INTEREST. 

There  is  great  necessity  for  the  utmost  care  in  the 
calculation  and  declaration  of  dividends.  It  has  hap- 
pened in  experience  that  associations  have  become 
greatly  embarrassed  on  account  of  carelessness  or  in- 
competency  in  this  connection.  A  secretary,  too 
anxious  to  make  a  good  showing  for  his  association, 
may  become  a  little  too  liberal  in  his  estimate  of 
profits.  Directors,  being  sometimes  careless  in  the 
discharge  of  their  duties,  accept  the  secretary's  esti- 
mate and  declare  dividends  accordingly.  The  associ- 
ation runs  along  smoothly  enough  for  two  or 
three  terms,  and  then  unexpectedly  begins  to  find 
itself  embarrassed.  Investigation  shows  that  this  has 
resulted  from  the  over-estimate  of  profits,  and  the 
declaration  of  too  liberal  dividends.  If  such  a  mistake 
is  discovered  early  enough  it  may  not  be  serious  in  its 
consequences.  It  will  only  be  necessary  to  run  a  term 
or  two  without  dividends,  or  with  greatly  reduced 
dividends,  until  the  association  recovers  itself.  But 
such  a  situation  is  awkward,  to  say  the  least,  and 
prejudicial  to  the  good  name  of  the  association  and  its 
officers.  Therefore  such  an  error  should  be  guarded 
against  most  carefully. 

(197) 


198  MANUAL  FOR 

The  calculation  of  dividends  and  interest  generally 
constitutes  a  heavy  task  for  the  secretary.  It  is  un- 
fortunate that  there  is  not  more  uniformity  in  the 
methods  followed  by  different  associations.  If  divi- 
dends were  always  declared  according  to  the  same 
plan,  and  interest  were  always  calculated  upon  the 
same  basis,  it  would  be  easy  to  arrange  uniform 
systems  which  all  officers  could  follow.  This  would 
not  only  greatly  decrease  the  amount  of  labor  in  this 
connection,  but  would  obviate  the  constant  liability  to 
error  in  making  numerous  intricate  calculations. 

A  large  number  of  dividend  and  interest  tables 
have  been  prepared.  Several  of  these  tables,  which 
are  in  more  general  use  and  have  given  good  satis- 
faction, are  printed  herewith.  They  will  be  very 
valuable  for  use  in  those  associations  following  the 
same  plans  upon  which  the  tables  are  based.  They 
will  be  valuable  for  reference  to  officers  and  members 
of  all  associations. 

APPLICATION  OF  PROFITS. 

The  profits  of  an  association  should  be  applied  as 
follows : 

1.  To  the  payment  of  the  expenses. 

2.  Such   portions   as   may   be   determined   semi- 
annually  or  annually  by  the  board  of  directors  should 
be  set  aside  as  a  reserve  fund  for  the  payment  of  con- 
tingent losses. 

3.  The  residue  should  be  apportioned  among  the 
members  in  proportion  to  their  average  investments. 

ILLUSTRATION. 

The  following  figures  are  taken  from  the  books  ot 
a  small  association  that  had  been  running  for  one  year : 


BUILDING  ASSOCIATIONS. 


199 


Dues  withdrawn  of  Ist-half  year's  dues  ..............  $2,393.00 

«  "  Of2d        "  "    .............  1,330.00 

At  end  of  first  half  year  .....  $5,678.00=Dues  account. 

Withdrawn  of  1st  K  year's 

dues  ..................  2,393.00 


Balance  ................  $3,285.00  Am't  in  for  full 

At  end  of  2d  half  year  : 
Dues  paid  in  for  the 

current  term  ....  $7,433.00* 
Withdrawn    during 

2dhalf  year  .....  1,330.00 

Balance  .......  $6,103.00 

Which  divided  by  2 
for  average,  equals  ........  $3,051.50  Avf^uii 


year. 


Full  amount  on  which  divi- 
dends are  to  be  declared. 


The  profits  of  the  association  from  which  the  aforesaid 
abstract  was  made,  had  been  $250.07 ;  one  per  cent,  of  the 
full  amount  on  which  dividends  are  to  be  declared  equals 
$63.36,  which  divided  into  $250.07  indicates  that  the  associa- 
tion may  declare  a  4  per  cent,  semi-annual  dividend.  This 
being  calculated  and  distributed  among  the  members 
amounted  to  $224.80.  Profits,  $250.07,  less  dividends,  $224.80, 
leaves  balance,  $25.27,  which  is  transferred  to  the  Reserve 
Fund. 

In  order  that  a  secretary  can  get  at  this  method  of  finding 
the  principal  the  following  form  will  be  found  useful : 


Balance 
on  last 
half  year. 

Withdrawn 
during  cur- 
rent half 
year. 

Paid  during 
current 
half  year. 

Withdrawn 
of  dues  paid 
during 
half  year. 

Balance 

ji 

«? 

^5 

Am't 
of 
Divi. 

*  The  proper  method  is  first  to  average  dues  paid  in  and  then  to 
deduct  dues  withdrawn. 


MANUAL  FOR 


SYSTEM  I. 


TABLES. 

The  following  tables  and  explanation  are  furnished 
by  Mr.  W.  L.  Davis  and  verified  by  Mr.  Chas.  H. 
Stewart. 

EXPLANATION. 

Example  of  the  First  Semi-annual  Dividend :  A  has  one 
share,  $1.00  weekly  dues.  He  has  paid  for  six  months, 
or  twenty-six  weeks.  The  dividend  declared  is  eight  per 
cent,  (semi-annual).  What  is  A's  portion? 

Turn  to  the  8  per  cent,  tables  (page  207).  Opposite  26,  the 
number  of  weeks  A  has  paid  $1.00,  you  find  $1.08,  which  is 
the  amount  of  $26.00  at  8  per  cent,  for  twenty-six  weeks 
upon  the  usual  computation  of  averages,  or,  in  other  words, 
the  proportion  of  dividend  declared  which  is  due  A. 

Example  of  the  second  and  all  subsequent  dividends:  B 
has  three  shares  (of  $1.00  per  share  dues).  He  has  paid 
$402.00.  The  dividend  declared  is  five  per  cent,  (semi- 
annual . )  What  is  B '  s  portion  ? 

Subtract  from  $402.00,  the  amount  he  has  paid  since  the 
last  dividend,  $3.00  per  night  for  twenty-six  weeks,  or  $78.00. 
Find  5  per  cent,  of  the  difference,  $324.00 ;  which  is  $16.20,  or 
dividend  upon  $324.00.  Now  turn  to  the  five  per  cent, 
tables  (page  204).  Opposite  26,  the  number  of  weeks  B  has 
paid  $3.00  since  the  last  settlement,  you  find  $2.025  in  the 
three-share  column,  which  is  the  amount  of  dividend  on 
$78.00 ;  now  add  $2.025  to  $16.20.  The  result,  $18.225,  is  the 
amount  of  dividend  due  B  on  $402.00. 


BUILDING  ASSOCIATIONS.  201 

• 

Shares,  $500.— Dues,  $1.00  per  week. 


TWO  PER  CENT  TABLES. 

No. 

ONE 

TWO 

THREE 

FOUR 

FlVB 

WEEKS 

SHAKE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

2 

.012 

3 

.010 

.013 

.020 

.023 

4 

.015 

.023 

.030 

.040 

5 

.011 

.023 

.035 

.046 

.060 

6 

.016 

.032 

.048 

.065 

.081 

7 

.021 

.043 

.065 

.086 

.110 

8 

.027 

.055 

.083 

.110 

.140 

9 

.034 

.069 

.104 

.138 

.173 

10 

.042 

.084 

.128 

.169 

.212 

11 

.050 

.101 

.148 

.203 

.254 

12 

.060 

.120 

.180 

.240 

.300 

13 

.070 

.140 

.210 

.280 

.350 

14 

.080 

.161 

.242 

.323 

.404 

15 

.092 

.185 

.277 

.370 

.462 

16 

.104 

.209 

.314 

.420 

.523 

17 

.117 

.235 

.353 

.470 

.590 

18 

.131 

.263 

.395 

.526 

.660 

19 

.146 

.292 

.438 

.585 

.731 

20 

.161 

.323 

.485 

.646 

.810 

21 

.177 

.355 

.533 

.710 

.890 

22 

.194 

.390 

.584 

.780 

.973 

23 

.212 

.424 

.636 

.850 

1.061 

24 

.230 

.461 

.692 

.923 

1.154 

25 

.250 

.500 

.750 

1.000 

1.250 

26 

.270 

.540 

.810 

1.080 

1.350 

202  MANUAL  FOR 

Shares,  $500.— Dues,  $1.00  per  week. 


THREE  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHAKES 

1 

2 

.011 

.014 

.020 

3 

.014 

.020 

.027 

.034 

4 

.011 

.023 

.034 

.045 

.057 

5 

.017 

.035 

.052 

.070 

.087 

6 

.024 

.048 

.073 

.097 

.121 

7 

.032 

.065 

.097 

.130 

.162 

8 

.041 

.t)83 

.124 

.165 

.207 

9 

.051 

.104 

.155 

.207 

.259 

10 

.063 

.127 

.192 

.254 

.318 

11 

.076 

.152 

.222 

.305 

.381 

12 

.090 

.180 

.270 

.360 

.450 

13 

.105 

.210 

.315 

.420 

.525 

14 

.121 

.242 

.364 

.485 

.606 

15 

.138 

.277 

.415 

.554 

.693 

16 

.157 

.314 

.470 

.627 

.784 

17 

.176 

.353 

.529 

.705 

.882 

18 

.197 

.395 

.592 

.790 

.987 

19 

.219 

.438 

.658 

.877 

1.096 

20 

.242 

.485 

.727 

.970 

1.212 

21 

.266 

.533 

.799 

1.065 

1.332 

22 

.292 

.584 

.875 

1.167 

1.459 

23 

.318 

.636 

.955 

1.273 

1.591 

24 

.345 

.692 

1.040 

1.385 

1.721 

25 

.375 

.750 

1.125 

1.500 

1.875 

26 

.410 

.810 

1.215 

1.620 

2.025 

BUILDING  ASSOCIATIONS.  203 

Shares,  $600.— Dues,  $1.00  per  week. 


FOUR  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 

SHARE 

Two 

SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

2 

.010 

.014 

.020 

.024 

3 

.018 

.027 

.037 

.046 

4 

.015 

.031 

.045 

.061 

.076 

5 

.023 

.046 

.069 

.093 

.116 

6 

.032 

.065 

.097 

.130 

.162 

.   7 

.043 

.086 

.129 

.173 

.216 

8 

.055 

.110 

.165 

.221 

.276 

9 

.069 

.140 

.207 

.277 

.346 

10 

.085 

.169 

.255 

.340 

.424 

11 

.101 

.203 

.305 

.406 

.510 

12 

.120 

.240 

.360 

.480 

.600 

13 

.122 

.280 

.420 

.560 

.700 

14 

.161 

.323 

.485 

.646 

.810 

15 

.185 

.370 

.554 

.740 

.924 

16 

.209 

.420 

.627 

.837 

1.046 

17 

.235 

.470 

.705 

.940 

1.176 

18 

.263 

.526 

.790 

1.053 

1.316 

19 

.292 

.585 

.877 

1.170 

1.462 

20 

.323 

.646 

.970 

1.293 

1.616 

21 

.355 

.710 

1.065 

1.421 

1.776 

22 

.389 

.780 

1.167 

1.557 

1.946 

23 

.424 

.850 

1.273 

1.697 

2.122 

24 

.460 

.923 

1.384 

1.846 

2.310 

25 

.500 

1.000 

1.500 

2.000 

2.500 

— 

26 

.540 

1.080 

1.620 

2.160 

2.700 

204  MANUAL  FOR 

Shares,  $500.— Dues,  $1.00  per  week. 


FIVE  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHARER 

1 

.010 

2 

.012 

.020 

.024 

.030 

3 

.011 

.023 

.034 

.046 

.057 

4 

.020 

.039 

.057 

.076 

.095 

5 

.029 

.058 

.087 

.116 

.145 

6 

.040 

.081 

.121 

.162 

.202 

7 

.054 

.108 

.162 

.215 

.270 

8 

.069 

.140 

.207 

.276 

.345 

9 

.086 

.173 

.260 

.346 

.432 

10 

.106 

.212 

.320 

.424 

.530 

11 

.127 

.254 

.381 

.510 

.635 

12 

.150 

.300 

.450 

.600 

.750 

13 

.175 

.350 

.525 

.700 

.875 

U 

.202 

.404 

.606 

.810 

1.010 

15 

.231 

.462 

.693 

.924 

1.155 

16 

.261 

.523 

.784 

1.046 

1.307 

17 

.294 

.590 

.882 

1.176 

1.470 

IS 

.329 

.660 

.987 

1.316 

1.645 

19 

.365 

.731 

1.096 

1.462 

1.827 

20 

.404 

.810 

1.212 

1.616 

2.020 

21 

.444 

.890 

1.332 

1.776 

2.220 

22 

.486 

.973 

1.460 

1.946 

2.432 

23 

.530 

1.061 

1.591 

2.122 

2.652 

24 

.577 

1.154 

1.731 

2.310 

2.885 

25 

.625 

1.250 

1.875 

2.500 

3.125 

— 

26 

.675 

1.350 

2.025 

2.700 

3.375 

BUILDING  ASSOCIATIONS.  205 

Shares,  $500.— Dues,  $1.00  per  week. 


SIX  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

.012 

2 

.014 

.021 

.030 

.036 

3 

.014 

.028 

.041 

.055 

.070 

4 

.023 

.047 

.068 

.091 

.114 

5 

.035 

.065 

.104 

.140 

.174 

6 

.048 

.097 

.146 

.194 

.243 

7 

.065 

.129 

.194 

.260 

.324 

8 

.083 

.165 

.248 

.331 

.414 

9 

.104 

.207 

.311 

.415 

.520 

10 

.127 

.254 

.383 

.510 

.636 

11 

.152 

.305 

.457 

.610 

.762 

12 

.180 

.360 

.540 

.720 

.900 

13 

.210 

.420 

.630 

.840 

1.050 

14 

.242 

.485 

.727 

.970 

1.212 

15 

.277 

.554 

.830 

1.110 

1.386 

16 

.314 

.627 

.941 

1.255 

1.570 

17 

.353 

.705 

1.058 

1.411 

1.764 

18 

.395 

.789 

1.184 

1.580 

1.974 

19 

.438 

.877 

1.316 

1.754 

2.193 

20 

.485 

.970 

1.454 

1.940 

2.424 

21 

.533 

1.065 

1.598 

2.131 

2.664 

22 

.584 

1.167 

1.800 

2.335 

2.920 

23 

.636 

1.273 

1.910 

2.546 

3.183 

24 

.692 

1.385 

2.077 

2.770 

3.462 

25 

.750 

1.500 

2.250 

3.000 

3.750 

26 

.810 

1.620 

2.430 

3.240 

4.050 

206  MANUAL  FOR 

Shares,  $500.— Dues,  $1.00  per  week. 


SEVEN  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHAKE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

.010 

.011 

.014 

2 

.017 

.025 

.033 

.042 

3 

.016 

..032 

.048 

.064 

.080 

4 

.026 

.054 

.080 

.106 

.133 

5 

.040 

.081 

.122 

.162 

.203 

6 

.056 

.113 

.170 

.227 

.283 

7 

.075 

.151 

.227 

.302 

.380 

8 

.096 

.193 

.289 

.386 

.483 

9 

.121 

.242 

.363 

.484 

.605 

10 

.148 

.297 

.447 

.593 

.742 

11 

.178 

.355 

.533 

.711 

.890 

12 

.210 

.420 

.630 

.840 

1.050 

13 

.245 

.490 

.735 

.960 

1.225 

14 

.283 

.565 

.850 

1.151 

1.414 

15 

.323 

.647 

.970 

1.293 

1.617 

16 

.366 

.732 

1.098 

1.464 

1.830 

17 

.411 

.823 

1.235 

1.646 

2.060 

18 

.460 

.921 

1.381 

1.842 

2.303 

19 

.512 

1.023 

1.535 

2.047 

2.560 

20 

.565 

1.131 

1.697 

2.262 

2.830 

21 

.621 

1.243 

1.864 

2.486 

3.110 

22 

.681 

1.362 

2.043 

2.724 

3.405 

23 

.736 

1.485 

2.230 

2.971 

3.713 

24 

.808 

1.615 

2.423 

3.231 

4.040 

25 

.875 

1.750 

2.625 

3.500 

4.375 

26 

.945 

1.890 

2.835 

3.780 

4.725 

BUILDING  ASSOCIATIONS.  207 

Shares,  $600.— Dues,  $1.00  per  week. 


EIGHT  PER  CENT  TABLES. 

No. 

WEEKS 

ONE 

SHARE 

Two 
SHARES 

THREE 
SHARES 

FOUR 

SHARES 

FlVB 

SHARKS 

1 

.010 

.013 

.  .016 

2 

.020 

.029 

.040 

.050 

3 

.018 

.037 

.055 

.073 

.092 

4 

.030 

.062 

.091 

.121 

.152 

5 

.046 

.093 

.140 

.185 

.232 

6 

.065 

.129 

.194 

.260 

.324 

7 

.086 

.173 

.260 

.345 

.432 

8 

.110 

.221 

.331 

.441 

.552 

9 

.138 

.277 

.415 

.553 

.692 

10 

.169 

.340 

.511 

.680 

.850 

11 

.203 

.406 

.610 

.813 

1.016 

12 

.240 

.480 

.720 

.960 

1.200 

13 

.280 

.560 

.840 

1.120 

1.400 

14 

.323 

.646 

.970 

1.293 

1.616 

15 

.369 

.740 

1.108 

1.478 

1.850 

16 

.418 

.837 

1.255 

1.673 

2.092 

17 

.470 

.941 

1.411 

1.881 

2.352 

18 

.526 

1.053 

1.580 

2.105 

2.632 

19 

.585 

1.170 

1.754 

2.340 

2.924 

20 

.646 

1.293 

1.940 

2.585 

3.232 

21 

.710 

1.421 

2.131 

2.841 

3.552 

22 

.778 

1.557 

2.335 

3.113 

3.892 

23 

.856 

1.697 

2.546 

3.395 

4.244 

24 

.923 

1.846 

2.770 

3.693 

4.616 

25 

1.000 

2.000 

3.000 

4.000 

5.000 

»-•— 

26 

1.080 

2.160 

3.240 

4.320 

5.400 

208  MANUAL  FOR 

Shares,  $500.— Dues,  $1.00  per  week. 


NINE  PER  CENT  TABLES. 

No. 

ONE 

TWO 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

.010 

.014 

.020 

2 

.010 

.021 

.032 

.043 

.054 

3 

.020 

.041 

.062 

.083 

.103 

4 

.034 

.070 

.102 

.137 

.171 

5 

.052 

.104 

.156 

.209 

.261 

6 

.073 

.146 

.218 

.291 

.364 

7 

.097 

.194 

.291 

.389 

.486 

8 

.124 

.248 

.372 

,497 

.621 

9 

.155 

.311 

.467 

.623 

.780 

10 

.191 

.381 

.575 

.763 

.954 

11 

.228 

.457 

.686 

.914 

1.143 

12 

.270 

.540 

.810 

1.080 

1.350 

13 

.315 

.630 

.945 

1.260 

1.575 

U 

.363 

.727 

1.090 

1.454 

1.820 

15 

.416 

.831 

1.247 

1.663 

2.080 

16 

.471 

.941 

1.412 

1.883 

2.353 

17 

.529 

1.060 

1.587 

2.117 

2.646 

18 

.592 

.184 

1.776 

2.370 

2.961 

19 

.658 

.316 

1.973 

2.631 

3.290 

20 

.727 

.454 

2.181 

2.909 

3.636 

21 

.799 

.600 

2.397 

3.197 

3.996 

22 

.876 

.751 

2.627 

3.503 

4.380 

23 

.955 

.910 

2.864 

3.820 

4.770 

24 

1.038 

2.077 

3.116 

4.154 

5.193 

25 

1.125 

2.250 

3.375 

4.500 

5.625 

26 

1.215 

2.430 

3.645 

4.860 

6.075 

BUILDING  ASSOCIATIONS.  209 

Shares,  $500.— Dues,  $1.00  per  week. 


• 

TEN  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

.010 

.012 

.016 

.020 

2 

.012 

.024 

.036 

.050 

.060 

3 

.023 

.046 

.070 

.092 

.115 

4 

.040 

.078 

.114 

.152 

.190 

5 

.060 

.116 

.174 

.232 

.290 

6 

.081 

.162 

.243 

.324 

.405 

7 

.108 

.216 

.324 

.432 

.540 

8 

.138 

.276 

.414 

.552 

.690 

9 

.173 

.346 

.520 

.692 

.865 

10 

.212 

.424 

.640 

.850 

1.060 

11 

.254 

.510 

.762 

1.016 

1.270 

12 

.300 

.600 

.900 

1.200 

1.500 

13 

.350 

.700 

1.050 

1.400 

1.750 

14 

.404 

.810 

1.212 

1.616 

2.020 

15 

.462 

.924 

1.386 

1.850 

2.310 

16 

.523 

1.046 

1.569 

2.092 

2.615 

17 

.590 

1.176 

1.764 

2.352 

2.940 

18 

.660 

1.316 

1.974 

2.632 

3.290 

19 

.731 

1.462 

2.193 

2.924 

3.655 

20 

.810 

1.616 

2.424 

3.232 

4.040 

21 

.890 

1.776 

2.664 

3.552 

4.440 

22 

.973 

1.946 

2.919 

3.892 

4.865 

23 

1.061 

2.122 

3.183 

4.244 

5.305 

24 

1.154 

2.308 

3.462 

4.616 

5.770 

25 

1.250 

2.500 

3.750 

5.000 

6.250 

26 

1.350 

2.700 

4.050 

5.400 

6.750 

, 

210  MANUAL  FOR 

Shares,  $500.— Dues,  $1.00  per  week. 


. 

ELEVEN  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

.010 

.013 

.020 

.022 

2 

.013 

.026 

.040 

.053 

.066 

3 

.025 

.050 

.076 

.101 

.126 

I 

.042 

.086 

.125 

.167 

.210 

5 

.064 

.127 

.191 

.255 

.320 

6 

.089 

.178 

.267 

.356 

.445 

7 

.119 

.237 

.356 

.475 

.594 

8 

.152 

.303 

.455 

.607 

.760 

9 

.190 

.380 

.571 

.761 

.951 

10 

.233 

.466 

.703 

.933 

1.166 

11 

.279 

.560 

.840 

1.117 

1.397 

12 

.330 

.660 

.990 

1.320 

1.650 

13 

.385 

.770 

1.155 

1.540 

1.925 

U 

.444 

.890 

1.333 

1.777 

2.222 

15 

.510 

1.016 

1.524 

2.033 

2.541 

16 

.575 

1.150 

1.726 

2.301 

2.876 

17 

.647 

1.293 

1.940 

2.587 

3.234 

18 

.724 

1.447 

2.171 

2.895 

3.620 

19 

.804 

1.610 

2.412 

3.216 

4.020 

20 

.889 

1.777 

2.666 

3.555 

4.444 

21 

.977 

1.953 

2.930 

3.907 

4.884 

22 

1.070 

2.140 

3.211 

4.281 

5.351 

23 

1.167 

2.334 

3.501 

4.670 

5.835 

24 

1.266 

2.540 

3.810 

5.077 

6.347 

25 

1.375 

2.750 

4.125 

5.500 

6.875 

26 

1.485 

2.970 

4.455 

5.940 

7.425 

BUILDING  ASSOCIATIONS.  211 

Shares,  $500.— Dues,  $1.00  per  week. 


TWELVE  PER  CENT  TABLES. 

No. 

WEEKS 

ONE 

SHARE 

Two 

SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

.010 

.014 

.020 

.024 

2 

.014 

.030 

.043 

.057 

.072 

3 

.027 

.055 

.083 

.110 

.140 

4 

.045 

.093 

.137 

.182 

.230 

5 

.070 

.139 

.209 

.278 

.350 

6 

.097 

.194 

.291 

.389 

.486 

7 

.130 

.260 

.389 

.520 

.650 

8 

.165 

.331 

.497 

.662 

.830 

9 

.207 

.415 

.623 

.830 

1.040 

10 

.254 

.510 

.767 

1.017 

1.272 

11 

.305 

.609 

.914 

1.220 

1.524 

12 

.360 

.720 

1.080 

1.440 

1.800 

13 

.420 

.840 

1.260 

1.680 

2.100 

14 

.485 

.970 

1.454 

1.940 

2.424 

15 

.554 

1.110 

1.663 

2.217 

2.772 

16 

.627 

1.255 

1.883 

2.510 

3.140 

17 

.705 

1.411 

2.117 

2.822 

3.530 

18 

.790 

1.580 

2.369 

3.160 

3.950 

19 

.877 

1.756 

2.631 

3.510 

4.386 

20 

.970 

1.940 

2.909 

3.880 

4.850 

21 

1.065 

2.131 

3.197 

4.260 

5.330 

22 

1.167 

2.335 

3.503 

4.670 

5.840 

23 

1.273 

2.546 

3.820 

5.093 

6.366 

24 

1.381 

2.770 

4.154 

5.540 

6.924 

25 

1.500 

3.000 

4.500 

6.000 

7.500 

— 

26 

1\620 

3.240 

4.860 

6.480 

8.100 

212 


MANUAL  FOR 

Shares,  $250  or  $500.— Dues,  50c. 


per  week. 


TWO  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 
SHARE 

Two 
SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

2 

3 

.010 

.010 

4 

.012 

.015 

.020 

5 

.011 

.020 

.023 

.030 

6 

.010 

.016 

.024 

.033 

.040 

7 

.010 

.021 

.033 

.043 

.054 

8 

.013 

.027 

.042 

.055 

.070 

9 

.017 

.034 

.052 

.070 

.086 

10 

.021 

.043 

.064 

.084 

.106 

11 

.026 

.050 

.074 

.101 

.127 

12 

.030 

.060 

.090 

.120 

.150 

13 

.035 

.070 

.105 

.140 

.175 

14 

.041 

.080 

.121 

.161 

.202 

15 

.046 

.093 

.138 

.184 

.232 

16 

.052 

.104 

.157 

.210 

.261 

17 

.053 

.117 

.177 

.235 

.294 

18 

.065 

.131 

.198 

.263 

.329 

19 

.073 

.146 

.220 

.293 

.365 

20 

.080 

.161 

.243 

.323 

.404 

21 

.090 

.177 

.267 

.355 

.444 

22 

.097 

.194 

.292 

.390 

.486 

23 

.101 

.212 

.320 

.424 

.530 

24 

.116 

.230 

.346 

.461 

.577 

25 

.125 

.250 

.375 

.500 

.625 

26 

.135 

.270 

.405 

.540 

.675 

BUILDING  ASSOCIATIONS.  213 

Shares,  $250  or  $500.— Dues,  50c.  per  week. 


THREE  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARKS 

SHARES 

SHARES 

1 

2 

.010 

3 

.010 

.014 

.017 

4 

.011 

.017 

.022 

.030 

5 

.010 

.018 

.026 

.034 

.043. 

6 

.012 

.024 

.037 

.050 

.060 

7 

.016 

.033 

.050 

.064 

.081 

8 

.020 

.042 

.062 

.082 

.103 

9 

.026 

.052 

.077 

.103 

.130 

10 

.031 

.063 

.095 

.127 

.160 

11 

.040 

.076 

.111 

.152 

.190 

12 

.045 

.090 

.135 

.180 

.225 

13 

.052 

.105 

.157 

.210 

.262 

14 

.060 

.121 

.181 

.243 

.303 

15 

.070 

.138 

.207 

.277 

.346 

16 

.080 

.157 

.235 

.313 

.392 

17 

.090 

.177 

.264 

.352 

.441 

18 

.100 

.200 

.296 

.394 

.493 

19 

.104 

.220 

.330 

.440 

.550 

20 

.121 

.243 

.363 

.484 

.606 

21 

.133 

.267 

.400 

.532 

.666 

22 

.146 

.292 

.437 

.583 

.730 

23 

.160 

.320 

.480 

.636 

.795 

24 

.172 

.346 

.520 

.693 

.860 

25 

.187 

.375 

.562 

.750 

.937 

26 

.205 

.408 

.607 

.810 

1.012 

2i4  MANUAL  FOR 

Shares,  $260  or  $500.— Dues,  50c.  per  week. 


FOUR  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 
SHARE 

TAVO 

SHAKES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

2 

.010 

.012 

3 

.010 

.013 

.020 

.023 

4 

.015 

.022 

.031 

.040 

5 

.011 

.023. 

.034 

.047 

.060 

6 

.016 

.033 

.050 

.064 

.081 

7 

.021 

.043 

.064 

.087 

.110 

8 

.022 

.055 

.082 

.111 

.140 

9 

.034 

.069 

.103 

.140 

.173 

10 

.043 

.084 

.127 

.170 

.212 

11 

.050 

.101 

.153 

.203 

.254 

12 

.060 

.120 

.180 

.240 

.300 

13 

.061 

.140 

.210 

.280 

.350 

14 

.080 

.161 

.243 

.323 

.404 

15 

.093 

.184 

.277 

.370 

.462 

16 

.104 

.209 

.313 

.420 

.523 

17 

.117 

.235 

.352 

.471 

.590 

18 

.131 

.263 

.400 

.526 

.660 

19 

.146 

.293 

.440 

.584 

.732 

20 

.161 

.323 

.484 

.647 

.810 

21 

.177 

.355 

.532 

.711 

.890 

22 

.194 

.390 

.583 

.780 

.973 

23 

.212 

.425 

.636 

.850 

1.061 

24 

.230 

.461 

.693 

.923 

1.154 

25 

.250 

.500 

.750 

1.000 

1.250 

26 

.270 

.540 

.810 

1.080 

1.350 

B  UILDING  ASSOCIA  TJONS.  2 1 5 

Shares,  $260  or  $600.— Dues,  60c.  per  week. 


FIVE  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 

SHARE 

Two 

SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARKS 

1 

2 

.010 

.012 

.015 

3 

.011 

.017 

.023 

.030 

4 

.010 

.020 

.030 

.040 

.047 

5 

.014 

.030 

.043 

.060 

.072 

6 

.020 

.040 

.060 

.081 

.101 

7 

.027 

.054 

.081 

.107 

.140 

8 

.034 

.070 

.103 

.140 

.172 

9 

.043 

.086 

.130 

.173 

.216 

10 

.053 

.106 

.160 

.212 

.265 

11 

.063 

.127 

.190 

.254 

.317 

12 

.070 

.150 

/225 

.300 

.375 

13 

.087 

.170' 

.262 

.350 

.437 

14 

.101 

.202 

.303 

.404 

.505 

15 

.115 

.231 

.346 

.462 

.577 

16 

.130 

.261 

.392 

.523 

.653 

17 

.147 

.294 

.441 

-  .590 

.735 

18 

.164 

.330 

.493 

.660 

.822 

19 

.182 

.360 

.550 

.731 

.913 

20 

.202 

.404 

.606 

.808 

1.010 

21 

.222 

.444 

.666 

.890 

1.110 

22 

.243 

.486 

.730 

.973 

1.216 

23 

.265 

.530 

.795 

1.061 

1.326 

24 

.290 

.577 

.865 

1.154 

1.442 

25 

.312 

.620 

.932 

1.250 

1.562 

26 

.337 

.670 

1.012 

1.350 

1.687 

2i6  MANUAL  FOR 

Shares,  $250  or  $500.— Dues,  50c.  per  week, 


SIX  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 

SHARE 

Two 
SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

2 

.010 

.015 

.020 

3 

.014 

.020 

.027 

.034 

4 

.012 

.024 

.034 

.045 

.054 

5 

.020 

.032 

.052 

.070 

.087 

6 

.024 

.050 

.073 

.097 

.121 

7 

.033 

.064 

.097 

.130 

.162 

8 

.041 

.082 

.124 

.165 

.207 

9 

.052 

.103 

.155 

.207 

.260 

10 

.063 

.127 

.191 

.255 

.320 

11 

.076 

.153 

.230 

.304 

.381 

12 

.090 

.180 

.270 

.360 

.450 

13 

.105 

.210 

.315 

.420 

.525 

U 

.121 

.243 

.363 

.484 

.606 

15 

.140 

.277 

.415 

.554 

.693 

16 

.157 

.313 

.470 

.627 

.784 

17 

.177 

.352 

.530 

.705 

.882 

18 

.197 

.394 

.597 

.790 

.987 

19 

.220 

.440 

.657 

.877 

1.096 

20 

.243 

.484 

.727 

.970 

1.212 

21 

.266 

.532 

.800 

1.065 

1.332 

22 

.292 

.583 

.900 

1.167 

1.460 

23 

.320 

.636 

.954 

1.273 

1.591 

24 

.346 

.693 

1.040 

1.384 

1.731 

25 

.375 

.750 

1.125 

1.500 

1.875 

26 

.405 

.810 

1.210 

1.620 

2.025 

BUILDING  ASSOCIATIONS.  217 

Shares,  $250  or  $500.— Dues,  60c.  per  week. 


SEVEN  PER  CENT  TABLES. 

No. 

WEEKS 

ONE 

SHAKE 

Two 
SHAKES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

2 

.010 

.012 

.016 

.021 

3 

.010 

.016 

.024 

.032 

.040 

4 

.013 

.027 

.040 

.053 

.066 

5 

.020 

.040 

.061 

.081 

.101 

6 

.030 

.056 

.085 

.113 

.141 

7 

.037 

.075 

.114 

.151 

.190 

8 

.050 

.096 

.145 

.193 

.241 

9 

.060 

.121 

.181 

.242 

.302 

10 

.074 

.147 

.223 

.296 

.371 

11 

.090 

.177 

.266 

.355 

.444 

12 

.105 

.210 

.315 

.420 

.525 

13 

.122 

.245 

.367 

.480 

.612 

14 

.142 

.282 

.424 

.575 

.707 

15 

.162 

.324 

.485 

.646 

.810 

16 

.183 

.366 

.550 

.732 

.915 

17 

.205 

.411 

.617 

.823 

1.030 

18 

.230 

.460 

.691 

.921 

1.151 

19 

.250 

.511 

.767 

1.024 

1.280 

20 

.282 

.565 

.850 

1.131 

1.414 

21 

.320 

.621 

.933 

1.243 

1.554 

22 

.340 

.681 

1.021 

1.362 

1.702 

23 

.367 

.742 

1.114 

1.486 

1.856 

24 

.403 

.807 

1.211 

1.615 

2.020 

25 

.437 

.875 

1.312 

1.750 

2.187 

26 

.472 

.995 

1.412 

1.890 

2.362 

218  MANUAL  FOR 

Shares,  $250  or  $500.'-Dues,  50c   per  week. 


EIGHT  PER  CENT  TABLES. 

No. 

WEEKS 

ONE 
SHARE 

Two 

SHAKES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

.010 

2 

.010 

.015 

.020 

.024 

3 

.010 

.020 

.027 

.036 

.046 

4 

.015 

.031 

.045 

.060 

.076 

5 

.023 

.047 

.070 

.092 

.116 

6 

.033 

.065 

.097 

.130 

.162 

7 

.043 

.087 

.130 

.172 

.216 

8 

.055 

.111 

.165 

.220 

.276 

9 

.070 

.140 

.207 

.276 

.346 

10 

.084 

.170 

.255 

.340 

.424 

11 

.101 

.203 

.304 

.407 

.510 

12 

.120 

.240 

.360 

.480 

.600 

13 

.140 

.280 

.420 

.560 

.700 

14 

.161 

.323 

.484 

.647 

.810 

15 

.184 

.370 

.555 

.740 

.924 

16 

.210 

.420 

.627 

.836 

.046 

17 

.230 

.471 

.705 

.940 

.176 

18 

.263 

.527 

.790 

1.052 

.316 

19 

.293 

.584 

.877 

1.170 

.462 

20 

.323 

.647 

.970 

1.292 

.616 

21 

.355 

.711 

1.065 

1.420 

1.776 

22 

.390 

.780 

1.162 

1.556 

1.946 

23 

.430 

.850 

1.273 

1.697 

2.122 

24 

.461 

.923 

1.384 

1.847 

2.310 

25 

.500 

1.000 

1.500 

2.000 

2.500 

26 

.540 

1.080 

1.620 

2.160 

2.700 

BUILDING  ASSOCIATIONS.  219 

Shares,'  $250  or  $500.— Dues,  50c.  per  week. 


NINE  PER  CENT  TABLES. 

No. 

ONE 

Two 

THREE 

FOUR 

FIVE 

WEEKS 

SHARE 

SHARES 

SHARES 

SHARES 

SHARES 

1 

.010 

2 

.010 

.016 

.021 

.027 

3 

.010 

.020 

.031 

.042 

.051 

4 

.017 

.035 

.051 

.070 

.085 

5 

.026 

.052 

.090 

.105 

.130 

6 

.037 

.073 

.110 

.145 

.182 

7 

.050 

.097 

.145 

.195 

.243 

8 

.062 

.124 

.186 

.250 

.310 

9 

.080 

.155 

.233 

.312 

.390 

10 

.096 

.190 

.287 

.381 

.477 

11 

.114 

.230 

.343 

.457 

.571 

12 

.135 

.270 

.405 

.540 

.625 

13 

.157 

.315 

.471! 

.630 

.787 

U 

.181 

.363 

.545 

.727 

.910 

15 

.210 

.415 

.623 

.831 

1.040 

16 

.235 

.470 

.706 

.942 

1.176 

17 

.264 

.530 

.793 

1.060 

1.323 

18 

.296 

.592 

.890 

1.185 

1.480 

19 

.330 

.660 

.986 

1.315 

1.644 

20 

.363 

.727 

1.090 

1.455 

1.820 

21 

.400 

.800 

1.196 

1.600 

2.000 

22 

.437 

.875 

1.313 

1.752 

2.190 

23 

.480 

.960 

1.432 

1.910 

2.387 

24 

.520 

1.040 

1.560 

2.077 

2.596 

25 

.562 

1.125 

1.687 

2.250 

2.812 

26 

.607 

1.215 

1.822 

2.430 

3.037 

220  MANUAL  FOR 

Shares,  $250  or  $500.— Dues,  50c.  per  week, 


TEN  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 

SHARK 

Two 

SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

.010 

.010 

2 

.012 

.020 

.024 

.030 

3 

.011 

.023 

.034 

.046 

.057 

4 

.020 

.040 

.057 

.076 

.095 

5 

.030 

.060 

.087 

.116 

.145 

6 

.040 

.081 

.121 

.162 

.202 

7 

.052 

.110 

.162 

.216 

.270 

8 

.070 

.140 

.207 

.276 

.345 

9 

.086 

.173 

.260 

.341 

.432 

10 

.101 

.212 

.320 

.424 

.530 

11 

.127 

.254 

.381 

.510 

.635 

12 

.150 

.300 

.450 

.600 

.750 

13 

.175 

.350 

.525 

.700 

.875 

14 

.202 

.404 

.606 

.810 

1.010 

15 

.231 

.462 

.693 

.924 

1.155 

16 

.261 

.523' 

.784 

1.046 

1.307 

17 

.294 

.590 

.882 

1.176 

1.470 

18 

.330 

.660 

.987 

1.316 

1.645 

19 

.360 

.731 

1.096 

1.462 

1.827 

20 

.404 

.810 

1.212 

1.616 

2.020 

21 

.444 

.890 

1.332 

1.776 

2.220 

22 

.486 

.973T 

1.460 

1.946 

2.432 

23 

.530 

1.061 

1.591 

2.122 

2.652 

24 

.577 

1.154 

1.731 

2.310 

2.880 

25 

.620 

1.250 

1.875 

2.500 

3.125 

26 

.670 

1.350 

2.025 

2.700 

3.375 

BUILDING  ASSOCIATIONS.  221 

Shares,  $250  or  $600.— Dues,  50c.  per  week. 


ELEVEN  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 
SHAKE 

Two 

SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 
SHARES 

1 

.010 

.011 

2 

.013 

.020 

.027 

.033 

3 

.012 

.025 

.032 

.050 

.063 

4 

.020 

.043 

.062 

.083 

.104 

5 

.032 

.063 

.095 

.127 

.160 

6 

.044 

.090 

.133 

.130 

.222 

7 

.060 

.118 

.180 

.237 

.297 

8 

.076 

.151 

.227 

.303 

.380 

9 

.095 

.190 

.286 

.380 

.475 

10 

.110 

.233 

.302 

.467 

.583 

11 

.140 

.280 

.420 

.560 

.700 

12 

.160 

.330 

.495 

.660 

.825 

13 

.192 

.385 

.577 

.770 

.962 

14 

.222 

.445 

.666 

.890 

1.111 

15 

.254 

.510 

.762 

1.017 

1.270 

16 

.287 

.575 

.862 

1.150 

1.440 

17 

.323 

.686 

.970 

1.293 

1.617 

18 

.362 

.723 

1.085 

1.447 

1.810 

19 

.402 

.804 

1.206 

1.610 

2.010 

20 

.444 

.890 

1.333 

1.777 

2.222 

21 

.487 

.976 

1.465 

1.953 

2.442 

22 

.535 

1.070 

1.605 

2.140 

2.675 

23 

.583 

1.167 

1.755 

2.334 

2.917 

24 

.633 

1.270 

1.954 

2.540 

3.173 

25 

.687 

1.375 

2.062 

2.750 

3.437 

26 

.742 

1.485 

2.227 

2.970 

3.712 

222  MANUAL  FOR 

Shares,  $250  or  $500.— Dues,  50c.  per  week. 


TWELVE  PER  CENT  TABLES. 

No. 
WEEKS 

ONE 

SHARE 

Two 
SHARES 

THREE 
SHARES 

FOUR 
SHARES 

FIVE 

SHARES 

1 

.010 

.012 

2 

.014 

.021 

.020 

.036 

3 

.013 

.027 

.042 

.055 

.070 

4 

.022 

.046 

.070 

.091 

.114 

5 

.034 

.070 

.106 

.140 

.174 

6 

.050 

.097 

.145 

.195 

.243 

7 

.064 

.130 

.195 

.260 

.324 

8 

.082 

.165 

.250 

.331 

.414 

9 

.103 

.207 

.311 

.415 

.520 

10 

.127 

.255 

.383 

.510 

.636 

11 

.153 

.304 

.457 

.610 

.762 

12 

.180 

.360 

.540 

.720 

.900 

13 

.210 

.420 

.630 

.840 

1.050 

U 

.243 

.484 

.727 

.970 

1.212 

15 

.277 

.555 

.831 

1.103 

1.386 

16 

.313 

.627 

.941 

1.255 

1.570 

17 

.353 

.705 

1.060 

1.411 

1.764 

18 

.364 

.790 

1.184 

1.580 

1.974 

19 

.440 

.880 

1.315 

1.755 

2.193 

20 

.484 

.970 

1.455 

1.940 

2.424 

21 

.532 

1.065 

1.600 

2.131 

2.664 

22 

.583 

1.167 

1.752 

2.335 

2.920 

23 

.636 

1.273 

1.960 

2.547 

3.183 

24 

.690 

1.384 

2.077 

2.770 

3.462 

25 

.750 

1.500 

2.250 

3.000 

3.750 

26 

.810 

1.620 

2.430 

3.240 

4.050 

BUILDING  ASSOCIATIONS.  223 

SYSTEM  II. 


The  following  tables  and  explanation  are  furnished 
by  Mr,  Henry  L.  Smith, 

EXPLANATION. 

In  determining  the  semi-annual  dividend  to  which  a  share- 
holder is  entitled,  it  is  customary  to  compute  interest  on  the 
sum  to  his  credit  at  the  beginning  of  the  half-year,  and  to  add 
to  this  the  interest  on  the  equated  value  of  the  weekly  pay- 
ments made  during  the  half-year. 

Since  there  has  been  some  controversy  as  to  the  proper 
method  of  determining  the  equated  value  of  26  weekly  pay- 
ments, the  following  explanation  is  added  to  make  the  matter 
perfectly  clear : 

The  half-yearly  dues  are  paid  in  26  equal  installments,  the 
first  installment  being  paid  at  the  expiration  of  one  week  after 
the  beginning  of  the  half-year  and  the  last  installment  at  the 
«nd  of  the  half-year.  Hence  the  first  payment  has  been  on 
interest  for  25  weeks,  the  second  payment  for  24  weeks,  the 
third  for  23  weeks,  and  so  on  to  the  last  payment,  which,  being 
paid  on  the  last  night  of  the  half-year,  is  entitled  to  no  interest 
At  all. 

Now  assuming  the  weekly  payment  to  be  $1.00,  we  shall 
have  the  interest  on  $1.00  for  25,  24,  23,  22,  21,  20,  19,  18,  17, 
16,  15,  14,  13, 12,  11,  10,  9,  8,  7,  6,  5,  4,  3,  2,  1,  and  0  weeks= 
11.00  for  325  weeks,  or,  what  is  the  same  thing,  $12.50  for  26 
weeks. 

The  following  general  rule  (adapted  from  the  rule  for  deter- 
mining the  sum  of  an  arithmetical  progression)  will  be  found 


224  MANUAL  FOR 

applicable  for  determining  the  equated  value  of  the  payments 
for  any  number  of  weeks, 

RULE.  Multiply  the  weekly  payment  by  the  number  of  weeks 
less  one,  and  this  product  by  half  the  number  of  weeks.  Divide 
the  last  product  by  26  and  the  quotient  will  be  the  equated  invest- 
ment for  the  half  year. 

Thus  in  the  above  case,  the  weekly  payment  is  $1  and  the 
number  of  weeks  26.  Hence  $1X25X13-^26=$12.50  the 
equated  investment  as  before. 

In  order  to  save  the  above  computation  in  each  case,  the 
following  tables,  No.  1  and  2,  have  been  prepared  to  show  the 
equated  value  of  any  number  of  dollars  from  $1  to  $20,  for  any 
number  of  weeks  from  1  to  26,  regardless  of  the  rate  per  cent. 
The  figures  given  are  in  even  dollars,  as  it  is  assumed  that 
secretaries  will  not  compute  dividends  on  fractions  of  a 
dollar.* 

EXAMPLE.  What  is  the  equated  value  of  the  payment  of 
$7  per  week  for  15  weeks  ?  Under  the  head  of  7  shares  and 
opposite  the  number  15  will  be  found  $28,  which  is  the  re- 
quired answer. 

The  remaining  tables  show  the  interest  for  6  months  upon 
any  sum  from  $1  to  $1,000  for  any  rate  from  5  per  cent,  to  8  per 
cent.,  including  each  %  per  cent,  between  these  rates. 

To  determine  the  proper  dividend  from  these  tables  we 
have  two  cases :  first,  where  the  shares  have  been  in  force  for 
less  than  6  months,  and  second,  where  they  have  been  in 
force  for  more  than  6  months. 


*  For  the  convenience  of  those  who  may  wish  exact  figures  a  table. 
No.  3,  is  added,  in  which  the  equated  investment  is  given  in  dollars  and 
cents. 


BUILDING  ASSOCIATIONS.  225 

If  for  less  than  six  months,  find  the  equated  value  of  the 
investment  from  table  No.  1,  and  then  find  the  dividend  from 
the  interest  table  which  is  indicated  by  the  rate  per  cent,  of 
your  dividend. 

If  for  more  than  six  months,  find  the  amount  to  the  credit 
of  the  shareholder  at  the  beginning  of  the  half  year.  Add  to 
this  $12.50  for  each  dollar  share,  and  the  sum  will  be  the 
amount  upon  which  the  dividend  is  to  be  computed,  and  this 
dividend  may  be  found  at  once  from  the  interest  tables. 

EXAMPLE.  A  pays  $7  weekly  and  his  shares  have  been  in 
force  for  17  weeks.  What  is  his  dividend  at  7^  per  cent.  ? 
From  table  No.  1  we  find  his  equated  investment  to  be  $36, 
and  from  the  7%  per  cent,  table  we  find  the  interest  on  this 
sum  to  be  $1.30,  or  the  required  dividend. 

EXAMPLE.  B  pays  $6  per  week  and  his  six  shares  have 
been  in  force  more  than  six  months.  What  is  his  dividend  at 
7  per  cent,  assuming  that  he  had  $175  to  his  credit  at  the  begin- 
ning of  the  half  year?  $175+75  (6X$12.50)  =  $250.  The  7  per 
cent,  table  gives  the  interest  on  $200  as  $7.00  and  on  $50  a& 
$1.75,  hence  the  dividend  is  $7.00+ $1.75  or  $8.75. 


226  MANUAL  FOR 

No.  1. 

1  Share  to  10  Shares. 

Table  showing  equated  semi-annual  investment. 
Shares,  $1.00  per  week. 


*T* 

* 

A 

A 

«  A 

NO. 

Weeks. 

Share. 

Shares. 

Shares 

Shares. 

Shares 

Shares 

Shares 

Shares. 

Shares 

10 

Shares. 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

1 

2 

3 

1 

4 

1 

i 

i 

j 

« 

2 

5 

1 

1 

1 

( 

i 

i 

j 

3 

6 

1 

1 

2 

2 

• 

L 

4 

5 

5 

7 

1 

f 

3 

4 

L 

f 

6 

7 

8 

8 

1 

2 

i 
o 

4 

5 

6 

1 

8 

c 

10 

9 

1 

2 

4 

5 

6 

8 

C 

11 

12 

13 

10 

1 

3 

5 

6 

8 

10 

12 

13 

15 

17 

11 

2 

4 

6 

8 

10 

12 

14 

16 

19 

21 

12 

2 

5 

7 

10 

12 

15 

17 

20 

22 

25 

13 

3 

6 

9 

12 

15 

18 

21 

24 

27 

30 

14 

3 

7 

10 

14 

17 

21 

24 

28 

31 

35 

15 

4 

8 

12 

16 

20 

24 

28 

32 

36 

40 

16 

4 

9 

13 

18 

23 

27 

32 

36 

41 

46 

17 

5 

10 

15 

20 

26 

31 

36 

41 

47 

52 

18 

5 

11 

17 

23 

29 

35 

41 

47 

52 

58 

19 

6 

13 

19 

26 

32 

39 

46 

52 

59 

65 

20 

7 

14 

21 

29 

36 

43 

51 

58 

65 

73 

21 

8 

16 

24 

32 

40 

48 

56 

64 

72 

80 

22 

8 

17 

26 

35 

44 

53 

62 

71 

79 

88 

23 

9 

19 

29 

38 

48 

58 

68 

77 

87 

97 

24 

10 

81 

31 

42 

53 

63 

74 

84 

95 

106 

25 

11 

23! 

34 

46 

57 

69 

80 

92! 

103 

115 

26 

12 

25| 

37 

50 

62 

75| 

87 

100 

112 

125 

BUILDING  ASSOCIATIONS.  227 

No.  2. 

10  Shares  to  20  Shares. 

Table  showing  equated  semi-annual  investment. 
Shares,  $1.00  per  week. 


No. 
Weeks. 

11 

Shares. 

12 

Shares. 

13 
Shares. 

11 
Shares 

Shares 

Shares 

17 
Shares 

18 

Shares 

19 

Shares 

20 

Shares. 

$ 

$ 

1 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

1 

2 

3 

1 

1 

1 

1 

1 

1 

1 

2 

2 

2 

4 

2 

2 

2 

2 

3 

3 

m 

4 

4 

4 

5 

4 

4 

5 

5 

5 

6 

6 

6 

7 

7 

6 

6 

6 

7 

8 

8 

9 

10 

10 

10 

11 

7 

8 

9 

10 

11 

12 

12 

13 

14 

15 

16 

8 

11 

12 

14 

15 

16 

17 

18 

19 

20 

21 

9 

15 

16 

18 

19 

20 

22 

23 

24 

26 

27 

10 

19 

20 

22 

24 

25 

27 

29 

31 

32 

34 

11 

23 

25 

27 

29 

31 

33 

35 

38 

40 

42 

12 

27 

30 

33 

35 

38 

40 

43 

45 

48 

50 

13 

33 

36 

39 

42 

45 

48 

51 

54 

57 

60 

14 

38 

42 

45 

49 

52 

56 

59 

63 

66 

70 

15 

44 

48 

52 

56 

60 

64 

68 

72 

76 

80 

16 

50 

55 

60 

64 

69 

73 

78 

83 

87 

92 

17 

57 

62 

68 

73 

78 

83 

88 

94 

99 

104 

18 

64 

70 

76 

82 

88 

94 

100 

105 

111 

117 

19 

72 

78 

85 

92 

98 

105 

111 

118 

124 

131 

20 

80 

87 

95 

102 

109 

116 

124 

131 

138 

146 

21 

88 

96 

105 

113 

121 

129 

137 

145 

153 

161 

22 

97 

106 

115 

124 

133 

142 

151 

159 

168 

177 

23 

107 

116 

126!  136 

145 

155 

165 

175 

144 

194 

24 

116 

127 

138  148 

159 

169 

180 

191 

201 

212 

25 

126 

138  1501  161 

173 

184 

196 

207 

219 

230 

26 

137  150  162 

175 

187 

200 

212 

225 

237 

250 

228 


1 


S. 


bC      c3 

fl          r^3 


O 

•S 


•S 

H 


MANUAL  FOR 


05 


00 


CD 


00 


£5    I     S§e»5r^3o>S§i3i>c85'38«S'??'i>3o5^o»Sl>?8«S'8 


G> 
oo 


CD 
10 


CO 


9 1^  OC  CC  OS  O  •F-  N 


BUILDING  ASSOCIATIONS. 


229 


6  per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.02 

38 

.95 

75 

1.87 

2 

.05 

39 

.97 

76 

1.90 

3 

.07 

40 

1.00 

77 

1.92 

4 

.10 

41 

1.02 

78 

1.95 

5 

.12 

42 

1.05 

79 

1.97 

6 

.15 

43 

1.07 

80 

2.00 

7 

.17 

44 

1.10 

81 

2.02 

8 

.20 

45 

1.12 

82 

2.05 

9 

.22 

46 

1.15 

83 

2.07 

10 

.25 

47 

1.17 

84 

2.10 

11 

.27 

48 

1.20 

85 

2.12 

12 

.30 

49 

1.22 

86 

2.15 

13 

.32 

50 

1.25 

87 

2.17 

14 

.35 

51 

1.27 

88 

2.20 

15 

.37 

52 

1.30 

89 

2.22 

16 

.40 

53 

1.32 

90 

2.25 

17 

.42 

54 

1.35 

91 

2.27 

18 

.45 

55 

1.37 

92 

2.30 

19 

.47 

56 

1.40 

93 

2.32 

20 

.50 

57 

1.42 

94 

2.35 

21 

.52 

58 

1.45 

95 

2.37 

22 

.55 

59 

1.47 

96 

2.40 

23 

.57 

60 

1.50 

97 

2.42 

24 

.60 

61 

1.52 

98 

2.45 

25 

.62 

62 

1.55 

99 

2.47 

26 

.65 

63 

1.57 

27 

.67 

64 

1.60 

100 

2.50 

28 

.70 

65 

1.62 

200 

5.00 

29 

.72 

66 

1.65 

300 

7.50 

30 

.75 

67 

1.67 

400 

10.00 

31 

.77 

68 

1.70 

500 

12.50 

32 

.80 

69 

1.72 

600 

15.00 

33 

.82 

70 

1.75 

700 

17.50 

34 

.85 

71 

1.77 

800 

20.00 

35 

.87 

72 

1.80 

900 

22.50 

36 

.90 

73 

1.82 

1000 

25.00 

37 

.92 

74 

1.85 

230 


MANUAL  FOR 


per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.03 

38 

1.00 

75 

1.97 

2 

.05 

39 

1.02 

76 

1.99 

3 

.08 

40 

1.05 

77 

2.02 

4 

.10 

41 

1.08 

78 

2.05 

5 

.13 

42 

1.10 

79 

2.07 

6 

,16 

43 

1.13 

80 

2.10 

7 

,18 

44 

1.15 

81 

2.13 

8 

,21 

45 

1.18 

82 

2.15 

9 

.24 

46 

1.21 

83 

2.18 

10 

.26 

47 

1.23 

84 

2.20 

11 

.29 

48 

1.26 

85 

2.23 

12 

.31 

49 

1.29 

86 

2.26 

13 

.34 

50 

1.31 

87 

2.28 

14 

.37 

51 

1.34 

88 

2.31 

15 

,39 

52 

1.36 

89 

2.34 

16 

.42 

53 

1.39 

90 

2.36 

17 

.45 

54 

1.42 

91 

2.39 

18 

.47 

55 

1.44 

92 

2.41 

19 

,50 

56 

1.47 

93 

2.44 

20 

.52 

57 

1.50 

94 

2.47 

21 

.55 

58 

1.52 

95 

2.49 

22 

.58 

59 

1.55 

96 

2.52 

23 

.60 

60 

1.57 

97 

2.55 

24 

.63 

61 

1.60 

98 

2.57 

25 

.66 

62 

1.63 

99 

2.60 

26 

,68 

63 

1.65 

27 

.71 

64 

1.68 

100 

2.62 

28 

.73 

65 

1.71 

200 

5.25 

29 

.76 

66 

1.73 

300 

7.87 

30 

.79 

67 

1.76 

400 

10.50 

31 

.81 

68 

1.78 

500 

13.12 

32 

.84 

69 

1.81 

600 

15.75 

33 

.87 

70 

1.84 

700 

18.37 

34 

.89 

71 

1.86 

800 

21.00 

35 

.92 

72 

1.89 

900 

23.62 

36 

.94 

73 

1.92 

1000 

26.25 

37 

.97 

74 

1.94 

BUILDING  ASSOCIATIONS. 


231 


per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest 

1 

.03 

38 

1.04 

75 

2.06 

2 

.05 

39 

1.07 

76 

2.09 

3 

.08 

40 

1.10 

77 

2.12 

4 

.11 

41 

1.13 

78 

2.14 

5 

.14 

42 

1.15 

79 

2.17 

6 

.16 

43 

.18 

80 

2.20 

7 

.19 

44 

.21 

81 

2.23 

8 

.22 

45 

.24 

82 

2.25 

9 

.25 

46 

.26 

83 

2.28 

10 

.27 

47 

.29 

84 

2.31 

11 

.30 

48 

.32 

85 

2.34 

12 

.33 

49 

.35 

86 

2.36 

13 

.36 

50 

.37 

87 

2.39 

14 

.38 

51 

.40 

88 

2.42 

15 

.41 

52 

1.43 

89 

2.45 

16 

.44 

53 

1.46 

90 

2.47 

17 

.47 

54 

1.48 

91 

2.50 

18 

.49 

55 

1.51 

92 

2.53 

19 

.52 

56 

1.54 

93 

2.56 

20 

.55 

57 

1.57 

94 

2.58 

21 

.58 

58 

1.59 

95 

2.61 

22 

.60 

59 

1.62 

96 

2.64 

23 

.63 

60 

1.65 

97 

2.67 

24 

.66 

61 

1.68 

98 

2.69 

25 

.69 

62 

1.70 

99 

2.72 

26 

.71 

63 

1.73 

27 

.74 

64 

1.76 

100 

2.75 

.  28 

.77 

65 

1.79 

200 

5.50 

29 

.80 

66 

1.81 

300 

8.25 

30 

.82 

67 

1.84 

400 

11.00 

31 

.85 

68 

1.87 

500 

13.75 

32 

.88 

69 

1.90 

600 

16.50 

33 

.91 

70 

1.92 

700 

19.25 

34 

.93 

71 

1.95 

800 

22.00 

35 

.96 

72 

1.98 

900 

24.75 

36 

.99 

73 

2.01 

1000 

27.50 

37 

1.02 

74 

2.03 

232 


MANUAL  FOR 


5f  per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.03 

38 

1.09 

75 

2.16 

2 

.06 

39 

1.12 

76 

2.18 

3 

.09 

40 

1.15 

77 

2.21 

4 

.11 

41 

1.18 

78 

2.24 

5 

.14 

42 

1.21 

79 

2.27 

6 

.17 

43 

1.24 

80 

2.30 

7 

.20 

44 

.26 

81 

2.33 

S 

.23 

45 

.29 

82 

2.36 

9 

.26 

46 

.32 

83 

2.39 

10 

.29 

47 

.35 

84 

2.41 

11 

.32 

48 

.38 

85 

2.44 

12 

.34 

49 

.41 

86 

2.47 

13 

.37 

50 

.44 

87 

2.50 

14 

.40 

51 

.47 

88 

2.53 

15 

.43 

52 

.49 

89 

2.56 

16 

.46 

53 

.52 

90 

2.59 

17 

.49 

54 

.55 

91 

2.62 

18 

.52 

55 

.58 

92 

2.64 

19 

.55 

56 

.61 

93 

2.67 

20 

.57 

57 

.64 

94 

2.70 

21 

.60 

58 

.67 

95 

2.73 

22 

.63 

59 

.70 

96 

2.76 

23 

.66 

60 

.72 

97 

2.79 

24 

.69 

61 

.75 

98 

2.82 

25 

.72 

62 

.78 

99 

2.85 

26 

.75 

63 

.81 

27 

.78 

64 

.84 

100 

2.87 

•8 

.80 

65 

.87 

200 

5.75 

29 

.83 

66 

.90 

300 

8.62 

30 

.86 

67 

.93 

400 

11.50 

31 

.89 

68 

1.95 

500 

14.37 

32 

.92 

69 

1.98 

600 

17.25 

33 

.95 

70 

2.01 

700 

20.12 

34 

.98 

71 

2.04 

800 

23.00 

35 

1.01 

72 

2.07 

900 

25.87 

36 

1.03 

73 

2.10 

1000 

28.75 

37 

1.06 

74 

2.13 

BUILDING  ASSOCIATIONS. 


233 


6  per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest 

1 

.03 

38 

1.14 

75 

2.25 

2 

.06 

39 

1.17 

76 

2.28 

3 

.09 

40 

1.20 

77 

2.31 

4 

.12 

41 

1.23 

78 

2.34 

5 

.15 

42 

1.26 

79 

2.37 

6 

.18 

43 

1.29 

80 

2.40 

7 

.21 

44 

1.32 

81 

2.43 

8 

.24 

45 

1.35 

82 

2.46 

9 

.27 

46 

1.38 

83 

2.49 

10 

.30 

47 

1.41 

84 

2.52 

11 

.33 

48 

1.44 

85 

2.55 

12 

.36 

49 

1.47 

86 

2.58 

13 

.39 

50 

1.50 

87 

2.61 

14 

.42 

51 

1.53 

88 

2.64 

15 

.45 

52 

1.56 

89 

2.67 

16 

.48 

53 

1.59 

90 

2.70 

17 

.51 

54 

1.62 

91 

2.73 

18 

.54 

55 

1.65 

92 

2.76 

19 

.57 

56 

1.68 

93 

2.79 

20 

.60 

57 

1.71 

94 

2.82 

21 

.63 

58 

1.74 

95 

2.85 

22 

.66 

59 

1.77 

96 

2.88 

23 

.69 

60 

1.80 

97 

2.91 

24 

.72 

61 

1.83 

98 

2.94 

25 

.75 

62 

1.86 

99 

2.97 

26 

.78 

63 

1.89 

27 

.81 

64 

1.92 

100 

3.00 

28 

.84 

65 

1.95 

200 

6.00 

29 

.87 

66 

1.98 

300 

9.00 

30 

.90 

67 

2.01 

400 

12.00 

31 

.93 

68 

2.04 

500 

15.00 

32 

.96 

69 

2.07 

600 

18.00 

33 

.99 

70 

2.10 

700 

21.00 

34 

1.02 

71 

2.13 

800 

24.00 

35 

1.05 

72 

2.16 

900 

27.00 

36 

1.08 

73 

2.19 

1000 

30.00 

37 

1.11 

74 

2.22 

234 


MANUAL  FOR 


per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.03 

38 

1.19 

75 

2.34 

2 

.06 

39 

1.22 

76 

2.37 

3 

.09 

40 

1.25 

77 

2.41 

4 

.12 

41 

1.28 

78 

2.44 

5 

.16 

42 

.31 

79 

2.47 

6 

.19 

43 

.34 

80 

2.50 

7 

.22 

44 

.37 

81 

2.53 

8 

.25 

45 

.41 

82 

2.56 

9 

.28 

46 

.44 

83 

2.59 

10 

.31 

47 

.47 

84 

2.62 

11 

.34 

48 

.50 

85 

2.66 

12 

.37 

49 

1.53 

86 

2.69 

13 

.41 

50 

1.56 

87 

2.72 

14 

.44 

51 

1.59 

88 

2.75 

15 

.47 

52 

1.62 

89 

2.78 

16 

.50 

53 

1.66 

90 

2.81 

17 

.53 

54 

1.69 

91 

2.84 

18 

.56 

55 

1.72 

92 

2.87 

19 

.59 

56 

1.75 

93 

2.91 

20 

.62 

57 

1.78 

94 

2.94 

21 

.66 

58 

1.81 

95 

2.97 

22 

.69 

59 

1.84 

96 

3.00 

23 

.72 

60 

1.87 

97 

2.03 

24 

.75 

61 

1.91 

98 

3.06 

25 

.78 

62 

1.94 

99 

3.09 

26 

.81 

63 

1.97 

27 

.84 

64 

2.00 

100 

3.12 

28 

.87 

65 

2.03 

200 

6.25 

29 

.91 

66 

2.06 

300 

9.37 

30 

.94 

67 

2.09 

400 

12.50 

31 

.97 

68 

2.12 

500 

15.62 

32 

1.00 

69 

2.16 

600 

18.75 

33 

1.03 

70 

2.19 

700 

21.87 

34 

1.06 

71 

2.22 

800 

25.00 

35 

1.09 

72 

2.25 

900 

28.12 

36 

1.12 

73 

2.28 

1000 

31.25 

37 

1.16 

74 

2.31 

BUILDING  ASSOCIATIONS. 


235 


per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.03 

38 

1.23 

75 

2.44 

2 

.06 

39 

1.27 

76 

2.47 

3 

.10 

40 

1.30 

77 

2.50 

4 

.13 

41 

1.33 

78 

2.53 

5 

.16 

42 

1.36 

79 

2.57 

6 

.19 

43 

1.40 

80 

2.60 

7 

.23 

44 

1.43 

81 

2.63 

8 

.26 

45 

1.46 

82 

2.66 

9 

.29 

46 

1.49 

83 

2.70 

10 

.32 

47 

1.53 

84 

2.73 

11 

.36 

48 

1.56 

85 

2.76 

12 

.39 

49 

.59 

86 

2.79 

13 

.42 

50 

.62 

87 

2.83 

14 

.45 

51 

.66 

88 

2.86 

15 

.49 

52 

.69 

89 

2.89 

16 

.52 

53 

.72 

90 

2.92 

17 

.55 

54 

.75 

91 

2.96 

18 

.58 

55 

.79 

92 

2.99 

19 

.62 

56 

.82 

93 

3.02 

20 

.65 

57 

.85 

94 

3.05 

21 

.68 

58 

.88 

95 

3.09 

22 

.71 

59 

.92 

96 

3.12 

23 

.75 

60 

.95 

97 

3.15 

24 

.78 

61 

.98 

98 

3.18 

25 

.81 

62 

2.01 

99 

3.22 

26 

.84 

63 

2.05 

27 

.88 

64 

2.08 

100 

3.25 

28 

.91 

65 

2.11 

200 

6.50 

29 

.94 

66- 

2.14 

300 

9.75 

30 

,97 

67 

2.18 

400 

13.00 

31 

1.01 

68 

2.21 

500 

16.25 

32 

1.04 

69 

2.24 

600 

19.50 

33 

1.07 

70 

2.27 

700 

22.75 

34 

1.10 

71 

2.31 

800 

26.00 

35 

1.14 

72 

2.34 

900 

29.25 

36 

1.17 

73 

2.37 

1000 

32.50 

37 

1.20 

74 

2.40 

MANUAL  FOR 


6f  per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.03 

38 

1.28 

75 

2.53 

2 

.07 

39 

1.32 

76 

2.56 

3 

.10 

40 

1.35 

77 

2.60 

4 

.13 

41 

1.38 

78 

2.63 

5 

.17 

42 

1.42 

79 

2.67 

6 

.20 

43 

1.45 

80 

2.70 

7 

.24 

44 

1.48 

81 

2.73 

8 

.27 

45 

1.52 

82 

2.77 

9 

.30 

46 

1.55 

83 

2.80 

10 

.34 

47 

1.59 

84 

2.83 

11 

.37 

48 

1.62 

85 

2.87 

12 

.40 

49 

1.65 

86 

2.90 

13 

.44 

50 

1.69 

87 

2.94 

14 

.47 

51 

1.72 

88 

2.97 

15 

.51 

52 

1.75 

89 

3.00 

16 

.54 

53 

1.79 

90 

3.04 

17 

.57 

54 

1.82 

91 

3.07 

18 

.61 

55 

1.86 

92 

3.10 

19 

.64 

56 

1.89 

93 

3.14 

20 

.67 

57 

1.92 

94 

3.17 

21 

.71 

58 

1.96 

95 

3.21 

22 

.74 

59 

1.99 

96 

3.24 

23 

.78 

60 

2.02 

97 

3.27 

24 

.81 

61 

2.06 

98 

3.31 

25 

.84 

62 

2.09 

99 

3.34 

26 

.88 

63 

2.13 

27 

.91 

64 

2.16 

100 

3.37 

28 

.94 

65 

2.19 

200 

6.75 

29 

.98 

66 

2.23 

300 

10.12 

30 

1.01 

67 

2.26 

400 

13.50 

31 

1.05 

68 

2.29 

500 

16.87 

32 

1.08 

69 

2.33 

600 

20.25 

33 

1.11 

70 

2.36 

700 

23.62 

34 

1.15 

71 

2.40 

800 

27.00 

35 

1.18 

72 

2.43 

900 

30.37 

36 

1.21 

73 

2.46 

1000 

33.75 

37 

1.25 

74 

2.50 

BUILDING  ASSOCIATIONS. 


237' 


7  per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest 

Dollars. 

Interest. 

1 

.03 

38 

1.33 

75 

2.62 

2 

.07 

39 

1.36 

76 

2.66 

3 

.10 

40 

1.40 

77 

2.69 

4 

.14 

41 

1.43 

78 

2.73 

5 

.17 

42 

1.47 

79 

2.76 

6 

.21 

43 

1.50 

80 

2.80 

7 

.24 

44 

1.54 

81 

2.83 

8 

.28 

45 

1.57 

82 

2.87 

9 

.31 

46 

1.61 

83 

2.90 

10 

.35 

47 

1.64 

84 

2.94 

11 

.38 

48 

1.68 

85 

2.97 

12 

.42 

49 

1.71 

86 

3.01 

13 

.45 

50 

1.75 

87 

3.04 

14 

.49 

51 

1.78 

88 

3.08 

15 

,52 

52 

1.82 

89 

3.11 

16 

.56 

53 

1.85 

90 

3.15 

17 

.59 

54 

1.89 

91 

3.18 

18 

.63" 

55 

1.92 

92 

3.22 

19 

.66 

56 

1.96 

93 

3.25 

20 

.70 

57 

1.99 

94 

3.29 

21 

.73 

58 

2.03 

95 

3.32 

22 

.77 

59 

2.06 

96 

3.36 

23 

.80 

60 

2.10 

97 

3.39 

24 

.84 

61 

2.13 

98 

3.43 

25 

.87 

62 

2.17 

99 

3.46 

26 

.91 

63 

2.20 

27 

.94 

64 

2.24 

100 

3.50 

28 

.98 

65 

2.27 

200 

7.00 

29 

1.01 

66 

2.31 

300 

10.50 

30 

1.05 

67 

2.34 

400 

14.00 

31 

1.08 

68 

2.38 

500 

17.50 

32 

1.12 

69 

2.41 

600 

21.00 

33 

1.15 

70 

2.45 

700 

24.50 

34 

1.19 

71 

2.48 

800 

28.00 

35 

1.22 

72 

2.52 

900 

31.50 

36 

1.26 

73 

2.55 

1000 

35.00 

37 

1.29 

74 

2.59 

238 


MANUAL  FOR 


per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.04 

38 

1.38 

75 

2.72 

2- 

.07 

39 

1.41 

76 

2.75 

3 

.11 

40 

1.45 

77 

2.79 

4 

.14 

41 

1.49 

78 

2.83 

5 

.18 

42 

1.52 

79 

2.86 

6 

.22 

43 

1.56 

80 

2.90 

7 

.25 

44 

1.59 

81 

2.94 

8 

.29 

45 

1.63 

82 

2.97 

9 

.33 

46 

1.67 

83 

3.01 

10 

.36 

47 

1.70 

84 

3.04 

11 

.40 

48 

1.74 

85 

3.08 

12 

.43 

49 

1.78 

86 

3.12 

13 

.47 

50 

1.81 

87 

3.15 

14 

.51 

51 

1.85 

88 

3.19 

15 

.54 

52 

1.88 

89 

3.23 

16 

.58 

53 

1.92 

90 

3.26 

17 

.62 

54 

1.96 

91 

3.30 

18 

.65 

55 

1.99 

92 

3.33 

19 

.69 

56 

2.03 

93 

3.37 

20 

.72 

57 

2.07 

94 

3.41 

21 

.76 

58 

2.10 

95 

3.44 

22 

.80 

59 

2.14 

96 

3.48 

23 

.83 

60 

2.17 

97 

3.52 

24 

.87 

61 

2.21 

98 

3.55 

25 

.91 

62 

2.25 

99 

3.59 

26 

.94 

63 

2.28 

27 

.98 

64 

2.32 

100 

3.62 

28 

1.01 

65 

2.36 

200 

7.25 

29 

1.05 

66 

2.39 

300 

10.87 

30 

1.09 

67 

2.43 

400 

14.50 

31 

1.12 

68 

2.46 

500 

18.12 

32 

1.16 

69 

2.50 

600 

21.75 

33 

1.20 

70 

2.54 

700 

25.37 

34 

1.23 

71 

2.57 

800 

29.00 

35 

1.27 

72 

2.61 

900 

32.62 

36 

1.30 

73 

2.65 

1000 

36.25 

37 

1.34 

74 

2.68 

BUILDING  ASSOCIATIONS. 


239 


per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.04 

38 

1.42 

75 

2.81 

2 

.07 

39 

.46 

76 

2.85 

3 

.11 

40 

.50 

77 

2.89 

4 

.15 

41 

.54 

78 

2.92 

5 

.19 

42 

.57 

79 

2.96 

6 

.22 

43 

.61 

80 

3.00 

7 

.26 

44 

.65 

81 

3.04 

8 

.30 

45 

.69 

82 

3.07 

9 

.34 

46 

.72 

83 

3.11 

10 

.37 

47 

.76 

84 

3.15 

11 

.41 

48 

1.80 

85 

3.19 

12 

.45 

49 

1.84 

86 

3.22 

13 

.49 

50 

1.87 

87 

3.26 

14 

.52 

51 

1.91 

88 

3.30 

15 

.56 

52 

1.95 

89 

3.34 

16 

.60 

53 

1.99 

90 

3.37 

17 

.64 

54 

2.02 

91 

3.41 

18 

.67 

55 

2.06 

92 

3.45 

19 

.71 

56 

2.10 

93 

3.49 

20 

.75 

57 

2.14 

94 

3.52 

21 

.79 

58 

2.17 

95 

3.56 

22 

.82 

59 

2.21 

96 

3.60 

23 

.86 

60 

2.25 

97 

3.64 

24 

.90 

61 

2.29 

98 

3.67 

25 

.94 

62 

2.32 

99 

3.71 

26 

.97 

63 

2.36 

27 

.01 

64 

2.40 

100 

3.75 

28 

.05 

65 

2.44 

200 

7.50 

29 

.09 

66 

2.47 

300 

11.25 

30 

.12 

67 

2.51 

400 

15.00 

31 

.16 

68 

2.55 

500 

18.75 

32 

.20 

69 

2.59 

600 

22.50 

33 

1.24 

70 

2.62 

700 

26.25 

34 

1.27 

71 

2.66 

800 

30.00 

35 

1.31 

72 

2.70 

900 

33.75 

36 

1.35 

73 

2.74 

iGOO 

37.50 

37 

1.39 

74 

2.77 

240 


MANUAL  FOR 


7|  per  cent  table. 


Dollars. 

Interest. 

Dollars. 

Interest. 

Dollars. 

Interest. 

1 

.04 

38 

1.47 

75 

2.91 

2 

.08 

39 

1.51 

76 

2.94 

3 

.12 

40 

1.55 

77 

2.98 

4 

.15 

41 

1.59 

78 

3.02 

5 

.19 

42 

1.63 

79 

3.06 

6 

.23 

43 

1.67 

80 

3.10 

7 

.27 

44 

1.70 

81 

3.14 

8 

.31 

45 

1.74 

82 

3.18 

9 

.35 

46 

1.78 

83 

3.22 

10 

.39 

47 

1.82 

84 

3.25 

11 

.43 

48 

1.86 

85 

3.29 

12 

.46 

49 

1.90 

86 

3.33 

13 

.50 

50 

1.94 

87 

3.37 

14 

.54 

51 

1.98 

88 

3.41 

15 

.58 

52 

2.01 

89 

3.45 

16 

.62 

53 

2.05 

90 

3.49 

17 

.66 

54 

2.09 

91 

3.53 

18 

.70 

55 

2.13 

92 

3.56 

19 

.74 

56 

2.17 

93 

3.60 

20 

.77 

57 

2.21 

94 

3.64 

21 

.81 

58 

2.25 

95 

3.68 

22 

.85 

59 

2.29 

96 

3.72 

23 

.89 

60 

2.32 

97 

3.76 

24 

.93 

61 

2.36 

98 

3.80 

25 

.97 

62 

2.40 

99 

3.84 

26 

1.01 

63 

2.44 

27 

1.05 

64 

2.48 

100 

3.87 

28 

1.08 

65 

2.52 

200 

7.75 

29 

1.12 

66 

2.56 

300 

11.62 

30 

1.16 

67 

2.60 

400 

15.50 

31 

1.20 

68 

2.63 

500 

19.37 

32 

1.24 

69 

2.67 

600 

23.25 

33 

1.28 

70 

2.71 

700 

27.12 

34 

1.32 

71 

2.75 

800 

31.00 

35 

1.36 

72 

2.79 

900 

34.87 

36 

1.39 

73 

2.83 

1000 

38.75 

37 

1.43 

74 

2.87 

BUILDING  ASSOCIATIONS. 


241 


8  per  cent  table. 


Dollars. 

Interest 

Dollars. 

Interest 

Dollars. 

Interest 

1 

.04 

38 

.52 

75 

3.00 

2. 

.08 

39 

.56 

76 

3.04 

3 

.12 

40 

.60 

77 

3.08 

4 

.16 

41 

.64 

78 

3.12 

5 

.20 

42 

.68 

79 

3.16 

6 

.24 

43 

.72 

80 

3.20 

7 

.28 

44 

.76 

81 

3.24 

8 

.32 

45 

.80 

82 

3.28 

9 

.36 

46 

1.84 

83 

3.32 

10 

.40 

47 

1.88 

84 

3.36 

11 

.44 

48 

1.92 

85 

3.40 

12 

.48 

49 

1.96 

86 

3.44 

13 

.52 

50 

2.00 

87 

3.48 

14 

.56 

51 

2.04 

88 

3.52 

15 

.60 

52 

2.08 

89 

3.56 

16 

.64 

53 

2.12 

90 

3.60 

17 

.68 

54 

2.16 

91 

3.64 

18 

.72 

55 

2.20 

92 

3.68 

19 

.76 

56 

2.24 

93 

3.72 

20 

.80 

57 

2.28 

94 

3.76 

21 

.84 

58 

2.32 

95 

3.80 

22 

.88 

59 

2.36 

96 

3.84 

23 

.92 

60 

2.40 

97 

3.88 

24 

.96 

61 

2.44 

98 

3.92 

25 

1.00 

62 

2.48 

99 

3.96 

26 

1.04 

63 

2.52 

27 

1.08 

64 

2.56 

100 

4.00 

28 

1.12 

65 

2.60 

200 

8.00 

29 

1.16 

66 

2.64 

300 

12.00 

30 

1.20 

67 

2.68 

400 

16.00 

31 

1.24 

68 

2.72 

500 

20.00 

32 

1.28 

69 

2.76 

600 

24.00 

33 

1.32 

70 

2.80 

700 

28.00 

34 

1.36 

71 

2.84 

800 

32.00 

35 

1.40 

72 

2.88 

900 

36.00 

36 

1.44 

73 

2.92 

1000 

40.00 

37 

1.48 

74 

2.96 

242  MANUAL  FOR 

SYSTEM    III. 


The  following  tables  and  explanation  are  furnished 
by  Mr,  Charles  Beuzer, 

EXPLANATION. 

TO   FIND   THE    AMOUNT   UPON    WHICH    DIVIDEND     FOR    ONE    SHARE 
IS  TO   BE   DECLARED. 

RULE.  Add  together  the  numbers  of  weeks  each  $1  has  been 
paid  in.  Divide  this  total  by  the  number  of  weeks  in  the  term. 
The  quotient  gives  the  average  amount  to  b«  credited  for  the 
entire  term. 

EXAMPLE.  A  pays  $1  weekly  for  a  term  of  26  weeks. 
What  is  the  average  amount  to  his  credit  at  the  close  of  the 
term  ?  Add  together  the  number  of  weeks  $1  has  been  paid 
in,  each  26,  25,  24,  etc.,  down  to  1.  The  total  is  351  weeks. 
That  is  to  say  the  credits  to  which  he  is  entitled  on  his  pay- 
ments as  he  has  made  them  are  together  equal  to  a  credit  of 
$1  for  351  weeks.  But  $1  for  351  weeks  is  equal  to  as  many 
dollars  for  26  weeks,  as  26  weeks  is  contained  in  351  weeks 
which  is  13>£  times,  or  $13.50. 

TO  FIND   THE   RATE    PER    CENT.     OF    DIVIDEND   TO   BE   DECLARED. 

RULE.  Average  the  amount  to  the  credit  of  each  member 
according  to  the  above  rule  and  example.  Then  find  the  sum  of 
all  the  average  amounts.  Find  what  per  cent,  the  total  profits  are 
of  this  sum  and  this  per  cent,  will  give  the  rate  of  dividend  to  be 
declared. 

EXAMPLE.  Suppose  the  association  has  125  members  and 
that  the  total  of  the  averaged  investments  is  $4,050.  Suppose 
that  the  profits  of  the  association  for  the  term  are  $265.  One 


BUILDING  ASSOCIATIONS.  243 

per  cent,  of  $4,050  is  $40.50.  $265  will  be  as  many  times  one 
per  cent,  of  $4,050  as  $40.50  is  contained  in  it  which  is  6}f 
times.  Since  it  is  not  convenient  to  calculate  interest  at  6|| 
per  cent,  the  rate  of  the  dividend  would  probably  be  fixed  at  6 
per  cent,  and  the  small  balance  of  profits  left  over  after  the 
distribution  at  this  rate  would  be  placed  in  the  reserve  fund. 

TO   FIND  THE   FIRST   DIVIDEND. 

RULE.  Find  the  per  cent,  of  the  given  amount  in  the  table  at 
the  given  rate  for  the  dividend. 

EXAMPLE.  A  has  paid  $1  weekly  on  5  shares  for  15 
weeks.  What  is  his  semi-annual  dividend,  the  rate  being  6 
per  cent,  per  annum  ?  From  the  table  on  page  249  we  find  that 
the  average  amount  to  his  credit  is  $23.10  which  at  6  per  cent, 
per  annum  gives  him  a  dividend  of  $0.69. 

TO   FIND   ANY   SUCCEEDING   DIVIDEND. 

RULE.  Add  to  the  amount  standing  to  the  credit  of  a  share- 
holder at  the  beginning  of  the  term,  his  average  credit  for  the  term. 
From  this  sum  deduct  any  dues  withdrawn  during  the  term. 
The  balance  will  be  the  amount  upon  which  the  dividend  is  to  be 
calculated. 

EXAMPLE.  A  has  $350  to  his  credit  at  the  beginning  of  the 
term.  He  is  entitled  to  an  average  credit  for  his  payments 
during  the  term  on  his  five  shares  of  $67.50.  This  added  to  the 
$350  amounts  to  $417.50.  Deduct  from  this  amount  $50  dues 
withdrawn,  leaving  a  balance  of  $367.50  the  amount  upon 
which  his  dividend  is  to  be  based  at  6  per  cent,  per  annum. 
His  dividend  is  $11.02. 

The  first  of  the  following  tables  shows  the  total 
number  of  weeks'  credit  on  $1  for  the  payments  made 
during  a  term.  The  remaining  tables  show  the 
average  amount  each  shareholder  has  to  his  credit 
for  any  number  of  weeks  from  1  to  26  and  for  any 
number  of  shares  from  1  to  10 : 


244 


MANUAL  FOR 


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TH  «  ec  «*  »o  to  t> 


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I3 


BUILDING  ASSOCIATIONS. 


245 


1  share  at  50  cents. 

2  shares  at  50c.  orl  share  at  $1. 

Week. 

DUES. 

Average 
Amount. 

Week. 

DUES. 

Average 
Amount 

1 

.50 

.019 

1 

1.00 

.03 

2 

1.00 

.057 

2 

2.00 

.11 

3 

1.50 

.115 

3 

3.00 

.23 

4 

2.00 

.192 

4 

4.00 

.38 

5 

2.50 

.288 

5 

5.00 

.57 

6 

3.00 

.404 

6 

6.00 

.80 

7 

3.50 

.538 

7 

7.00 

1.07 

8 

4.00 

.692 

8 

8.00 

1.38 

9 

4.50 

.865 

9 

9.00 

1.73 

10 

5.00 

1.06 

10 

10.00 

2.12 

11 

5.50 

1.27 

11 

11.00 

2.54 

12 

6.00 

1.50 

12 

12.00 

3.00 

13 

6.50 

1.75 

13 

13.00 

3.50 

14 

7.00 

2.02 

14 

14.00 

4.04 

15 

7.50 

2.31 

15 

15.00 

4.62 

16 

8.00 

2.62 

16 

16.00 

5.23 

17 

8.50 

2.94 

17 

17.00 

5.88 

18 

9.00 

3.29 

18 

18.00 

6.58 

19 

9.50 

3.65 

19 

19.00 

7.31 

20 

10.00 

4.04 

20 

20.00 

8.08 

21 

10.50 

4.44 

1  21 

21.00 

8.88 

22 

11.00 

4.86 

22 

22.00 

9.73 

23 

11.50 

5.31 

23 

23.00 

10.62 

24 

12.00 

5.77 

24 

24.00 

11.54 

25 

12.50 

6.25 

25 

25.00 

12.50 

26 

13.00 

6.75 

26 

26.00 

13.50 

246 


MANUAL  FOR 


3  shares  at  50  cents. 

4  shares  at  50c,  or  2  shares  at  $1. 

Week. 

DUES. 

Average 
Amount. 

Week. 

DUES. 

Average 
Amount. 

1 

1.50 

,05 

1 

2.00 

.07 

2 

3.00 

,17 

2 

4.00 

.22 

3 

4.50 

.34 

3 

6.00 

.46 

4 

6.00 

,57 

4 

8.00 

.76 

5 

7.50 

.86 

5 

10.00 

1.15 

6 

9.00 

1.20 

6 

12.00 

1.61 

7 

10.50 

1.61 

7 

14.00 

2.15 

8 

12.00 

2.07 

8 

16.00 

2.76 

9 

13.50 

2.59 

9 

18.00 

3.46 

10 

15.00 

3.18 

10 

20.00 

4.24 

11 

16.50 

3.81 

11 

22.00 

5.08 

12 

18.00 

4.50 

12 

24.00 

6.00 

13 

19.50 

5.25 

13 

26.00 

7.00 

14 

21.00 

6.06 

14 

28.00 

8.08 

15 

22.50 

6.93 

15 

30.00 

9.24 

16 

24.00 

7.86 

16 

32.00 

10.48 

17 

25.50 

8.82 

17 

34.00 

11.76 

18 

27.00 

9.87 

18 

36.00 

13.16 

19 

28.50 

10.95 

19 

38.00 

14.60 

20 

30.00 

12.12 

20 

40.00 

16.16 

21 

31,50 

13.32 

21 

42.00 

17.76 

22 

33.00 

14.58 

22 

44.00 

19.44 

23 

34.50 

15.93 

23 

46.00 

21.24 

24 

36.00 

17.31 

24 

48.00 

23.08 

25 

37.50 

18.75 

25 

50.00 

25.00 

26 

39.00 

20,25 

26 

52.00 

27.00 

BUILDING  ASSOCIATIONS. 


247 


5  shares  at  50  cents, 

6  shares  at  50c.  or  3  shares  at  $1, 

Week. 

DUES. 

Average 
Amount. 

Week. 

DUES. 

Average 
Amount. 

1 

2.50 

.09 

1 

3.00 

.11 

2 

5.00 

.28 

2 

6.00 

.34 

3 

7.50 

.57 

3 

9.00 

.69 

4 

10.00 

.96 

4 

12.00 

1.15 

5 

12.50 

1.44 

5 

15.00 

1.72 

6 

15.00 

2.02 

6 

18.00 

2.42 

7 

17.50 

2.69 

7 

21.00 

3.22 

8 

20.00 

3.46 

8 

24.00 

4.15 

9 

22.50 

4.32 

9 

27.00 

5.19 

10 

25.00 

5.30 

10 

30.00 

6.36 

11 

27.50 

6.35 

11 

33.00 

7.62 

12 

30.00 

7.50 

12 

36.00 

9.00 

13 

32.50 

8.75 

13 

39.00 

10.50 

14 

35.00 

10.10 

14 

42.00 

12.12 

15 

37.50 

11.55 

15 

45.00 

13.86 

16 

40.00 

13.10 

16 

48.00 

15.72 

17 

42.50 

14.70 

17 

51.00 

17.64 

18 

45.00 

16.45 

18 

54.00 

19.74 

19 

47.50 

18.25 

19 

57.00 

21.90 

20 

50.00 

20.20 

20 

60.00 

24.24 

21 

52.50 

22.20 

21 

63.00 

26.64 

22 

55.00 

24.30 

22 

66.00 

29.16 

23 

57.50 

26.55 

23 

69.00 

31.86 

24 

60.00 

28.85 

24 

72.00 

34.62 

25 

62.50 

31.25 

25 

75.00 

37.50 

26 

65.00 

33.75 

26 

78.00 

40.50 

MANUAL  FOR 


7  shares  at  50  cents, 

8  shares  at  50c.  or  4  shares  at  $1. 

Week. 

DUES. 

Average 
Amount. 

Week. 

DUES. 

Average 
Amount. 

1 

3.50 

.13 

1 

4.00 

.15 

2 

7.00 

.39 

2 

8.00 

.45 

3 

10.50 

.80 

3 

12.00 

.92 

4 

14.00 

1.34 

4 

16.00 

1,53 

5 

17.50 

2.01 

5 

20.00 

2.30 

6 

31.00 

2.82 

6 

24.00 

3.23 

7 

24.50 

3.76 

7 

28.00 

4.30 

8 

28.00 

4.84 

8 

32.00 

5.53 

9 

31.50 

6.05 

9 

36.00 

6.92 

10 

35.00 

7.42 

10 

40.00 

8.48 

11 

38.50 

8.89 

11 

44.00 

10.16 

12 

42.00 

10.50 

12 

48.00 

12.00 

13 

45.50 

12.25 

13 

52.00 

14.00 

14 

49.00 

14.14 

14 

56.00 

16.16 

15 

52.50 

16.17 

15 

60.00 

18.48 

16 

56.00 

18.34 

16 

64.00 

20.96 

17 

59.50 

20.58 

17 

68.00 

23.52 

18 

63.00 

23.03 

18 

72.00 

26.32 

19 

66.50 

25.55 

19 

76.00 

29.20 

20 

70.00 

28.28 

20 

80.00 

32.32 

21 

73.50 

31.08 

21 

84.00 

35.52 

22 

77.00 

34.02 

22 

88.00 

38.88 

23 

80.50 

37.17 

23 

92.00 

42.48 

24 

84.00 

40.39 

24 

96.00 

46.16 

25 

87.50 

43.75 

25 

100.00 

50.00 

26 

91.00 

47.25 

26 

104.00 

54.00 

BUILDING  ASSOCIATIONS. 


249 


9  shares  at  50  cents, 

10  shares  at  50c,  or  J  shares  at  $1, 

Week. 

DUES. 

Average 
Amount. 

Week. 

DUES. 

Average 
Amount. 

1 

4.50 

.17 

~r 

5.00 

.19 

2 

9.00 

.51 

2 

10.00 

.57 

3 

13.50 

1.03 

3 

15.00 

1.15 

4 

18.00 

1.72 

4 

20.00 

1.92 

5 

22.50 

2.59 

5 

25.00 

2.88 

6 

27.00 

3.63 

6 

30.00 

4.04 

7 

31.50 

4.84 

7 

35.00 

5.38 

8 

36.00 

6.22 

8 

40.00 

6.92 

9 

40.50 

7.78 

9 

45.00 

8.65 

10 

45.00  I       9.54 

!  10 

50.00 

10.60 

11 

49.50  j     11.43 

11 

55.00 

12.70 

12 

54.00 

13.50 

12 

60.00 

15.00 

13 

58.50 

15.75 

13 

65.00 

17.50 

14 

63.00 

18.18 

14 

70.00 

20.20 

15 

67.50 

20.79 

15 

75.00 

23.10 

16 

72.00 

23.58 

16 

80.00 

26.20 

17 

76.50 

26.46 

17 

85.00 

29.40 

18 

81.00 

29.61 

18 

90.00 

32.90 

19 

85.50 

32.85 

19 

95.00 

36.50 

20 

90.00 

36.36 

20 

100.00 

40.40 

21 

94.50 

39.96 

21 

105.00 

44.40 

22 

99.00 

43.74 

22 

110.00 

48.60 

23 

103.50 

47.79 

23 

115.00 

53.10 

24 

108.00 

51.93 

24 

120.00 

57.70 

25 

112.50 

56.25 

25 

125.00 

62.50 

26 

117.00 

60.75 

26 

130.00 

67.50 

250  MANUAL  FOR 

SIMPLE  INTEREST. 

The  following  method  for  calculating  simple  inter- 
est is  taken  from  "Nelson's  New  Bookkeeping,"  by 
permission  of  the  author. 

Interest  is  usually  calculated  on  the  basis  of  360  days  to 
the  year. 

The  simplest  method  of  computing  interest  is  to  do  it  at  the 
rate  of  6  per  cent,  per  annum,  and  add  or  subtract  when  it  is 
higher  or  lower  than  that. 

The  interest  for  60  days  at  6  per  cent,  per  annum  is  equal  to 
as  many  cents  as  there  are  dollars,  or  in  other  words,  is  1  per 
cent,  of  the  principal. 

The  reason  of  this  is  obvious.  6  per  cent,  per  annum  is 
>£  per  cent,  per  month,  or  1  per  cent,  for  two  months,  or  60 
days. 

The  interest  for  $750,  $225,  $327.50,  for  60  days,  at  6  per 
cent,  is  $7.50,  $2.25,  $3.28. 

Having  the  interest  for  60  days,  the  interest  for  any  shorter 
time  may  be  found  by  the  use  of  aliquots  of  60. 

ALIQUOTS    OF    60. 

30=4,  20=4,  15=4,  12=4,  10=4'  6=^0,  5=-,V  4—  &/ 


When  the  number  is  not  an  aliquot  of  60: 

For    7  take  ......   .................  6  and  1. 

"      8    "    ........................  6  "  2. 

"    14    "     ........................  12  "  2. 

"    19     "     ........................  15  "  4. 

"    26     "     ........................  20  "  6. 

"    27    "    .                                       ..15  "  12. 


BUILDING  ASSOCIATIONS.  251 

For  29  take 1  offSO. 

"    35    "    30  and  5. 

"    38    "    30,  6,  and  2. 

"    43    "    30,  12,  "   1. 

"    45    "     15  off  60. 

11    85   add 20  and  5. 

1.  To  find  the  interest  on  $375.67,  for  15  days,  at  6  per 
cent,  per  annum : 

4)3.76=interest  for  60  days. 

.94=interest  for  15  days. 

Interest  is  seldom  computed  on  cents  by  secretaries.  For 
50  cents  $1  is  added  to  dollars;  less  than  50  cents  are 
rejected. 

To  find  the  interest  for  a  number  of  days  that  is  an  aliquot  of 
60,  we  take  that  part  of  the  interest  for  60  days.  For  30  days  we 
take  %,  20  days  %,  15  days  %,  etc.  When  the  number  is  not 
an  aliquot  it  is  made  up  of  aliquots,  a-s  shown  in  the  preceding 
table. 

2.  To  find  the  interest  on  $675.15,  for  27  days,  at  6  per 
cent,  per  annum : 

$6.75=interest  for  60  days. 

1.687=)^  or  for  15  days. 
1.35  =K  or  for  12  days. 


3.037=interest  for  27  days. 

The  following  table  shows  the  interest  on  any 
amount  from  $1  to  $5,000  for  any  number  of  weeks 
from  1  to  52.  From  this  table  the  interest  at  any 
other  rate  per  cent,  can  be  found  by  aliquot  parts  as 
explained  before. 


252 


MANUAL  FOR 


OO  O  C  O  C?  O  O  G?  O  »     C<  M  CO  CO  COO  1>  -     Oi  CO  r>.  CO  CO 


BUILDING  ASSOCIATIONS.  25^ 

DIVISION  OF  PROFITS  IN  SERIAL  ASSOCIATIONS. 

One  of  the  most  difficult  problems  is  the  division 
of  profits  between  the  different  series,  and  many  plans 
have  been  devised  only  to  be  cast  aside  for  another. 
The  most  equitable  plan  seems  to  be  the  Partnership 
Rule,  that  is,  so  that  each  share  of  each  series  receives 
the  same  per  cent,  per  annum  for  the  average  time 
invested. 

The  partnership  plan  is  founded  on  what  is  sup- 
posed to  be  a  true  building  society  principle,  namely 
that  the  building  society  year  or  period  is  not  so  many 
months,  years,  or  days,  but  a  money  value  of  $100, 
and  no  division  of  gains  is  made,  except  on  paper, 
until  that  value  is  reached,  and  then  only  the  division 
is  made  to  the  shares  that  have  reached  that  value ; 
besides  which  the  partnership  plan  is  the  safest  for 
general  use,  as  it  accomodates  itself  to  every  possible 
situation  which  may  arise  in  building  society  accounts. 
The  profits  in  a  building  association  are  not  uniform 
from  year  to  year.  Various  circumstances  arise  in 
which  some  years  will  show  an  abnormally  large  profit, 
to  be  offset  by  another  year  in  which  the  profits  are 
smaller,  and  contingencies  may  arise  where  the  profits 
for  the  year  are  entirely  wiped  out.  In  all  these  vary- 
ing circumstances  the  partnership  plan  of  dividing 
the  profits  will  meet  with  more  fairness  and  equity  to 
all  stockholders  in  the  various  series. 

A  simple  rule  for  the  division  of  profits  under  the 
partnership  plan  is  : — 

"Multiply  investments  (dues  counted  full  paid)  by 
the  average  time  invested.  Add  results  for  product 
of  results.  Multiply  each  result  by  the  total  gain 
since  organization,  and  divide  in  each  case  by  product 


254  MANUAL  FOR 

of  results.  The  quotients  will  be  each  series'  gain. 
Divide  each  series'  gain  by  the  number  of  shares  in 
that  series  to  find  the  gain  per  share." 

The  work  is  greatly  lessened  by  the  following 
formula.  It  runs  in  numerical  order,  for  an  a.ssociation 
issuing  series,  beginning  with  the  last  series,  as  fol- 
lows :  i,  4,  9,  1 6,  25,  49,  64,  etc.  When  this  formula 
is  used  the  shares  are  multiplied  by  the  formula,  in- 
stead of  the  investment  being  multiplied  by  the  time. 
The  rest  of  the  rule  remains  unchanged. 

Series.  Shares.         Formula.         Result. 

i ioo  X  9  =  $900 

2 ioo  X  4  =   400 

3 IOO   X   I   =    IOO 

Product  of  result $1400 

Total  Gain.  Product  of  Results.  Gain  per  Series. 

$IOO      =  $9000  H-       $1400      =  $64.28 

IOO      =  4000  -r-           1400      =  28.57 

JOO      —  1000  -3-           1400      =  7.15 

Total  gain $100.00 

Gain  per  Share.  Shares.  Gain  per  Share. 

64.28  -7-          IOO         —  .64 

28.57  ~+~        IO°       —  >29 

7.15  -r-          IOO         =  .07 

The  formula  or  money-making  power  of  a  share  is 
determined  by  squaring  the  number  of  months  or 
years  as  the  case  may  be.  If  the  association  issues  its 
shares  monthly  use  the  square  of  the  months;  if 
yearly,  square  the  number  of  years  as  above. 


BUILDING  ASSOCIATIONS.  255 

The  solution  of  the  formula  :  If  a  $6  share  has  the 
money-making  power  of  one,  average  time  six  months, 
then  a  $12  share,  with  twelve  months  average  time, 
is  a  power  of  four,  the  latter  being  twice  the  money  of 
the  former,  and  twice  the  time,  (2X2  =4).  Therefore, 
if  the  $6  share  earns  7  cents,  the  $12  share  earns 
28  cents,  or  four  times  as  much. 

A  still  shorter  method  may  be  used  to  prove  the 
work.  Proceed  with  the  rule  until  the  "product  of 
results"  is  obtained,  in  this  case  $1400.  Then  divide 
the  gain  by  it,  as  follows :  $100  -T-  1400  =  .07.  This 
at  once  gives  the  gain  on  one  share  in  the  last  series, 
7  cents.  Multiply  this  by  the  formula  and  the  result 
is  the  gain  of  a  single  share  in  each  series. 

.07  X  i  =  .07 
.07  X  4  =  -28 
.07  X  9  =  -63 

The  average  time  used  is  just  one-half  of  the  whole 
time.  Fractional  parts  of  a  dollar  may  be  discarded. 


CHAPTER    XVII. 


LEGAL  FORMS  FOR  ASSOCIATIONS. 


NECESSITY  FOR  CORRECT  BLANK  FORMS. 

In  order  to  save  time  and  labor,  to  facilitate  and  to 
expedite  business,  and  to  secure  accuracy  and  uni- 
formity, every  association  should  be  supplied  with  a 
set  of  blank  legal  forms  for  the  proper  transaction  and 
recording  of  its  business.  Such  papers  must  be 
drawn  in  accordance  with  the  statutes  and  with  the 
rules  of  associations.  Since  the  statutes  differ  and 
rules  are  not  at  all  uniform  it  is  not  possible  to 
present  a  full  set  of  model  blanks. 

SPECIMEN  BLANKS. 

The  forms  printed  in  this  chapter  are  in  general 
use.  They  are  given  without  approval  or  criticism  in 
the  expectation  that  before  being  followed  by  any 
association  they  will  be  examined  carefully  to  see  if 
they  are  in  proper  form  for  use  by  that  particular 
association.  An  examination  of  these  forms  will  in- 
dicate anew  the  necessity  for  closer  co-operation  among 
building  associations  so  as  to  secure  more  uniform 
methods  of  operation. 

(256) 


BUILDING  ASSOCIATIONS.  257 

ARTICLES    OF  INCORPORATION  (OHIO). 

These  Articles  of  Incorporation  of  The 

Building  and  Loan  Company. 

Witness,  That  we,  the  undersigned,  natural  persons,  all  of 
whom  are  citizens  of  the  State  of  Ohio,  desiring  to  form  a  cor- 
poration, for  profit,  under  the  general  corporation  laws  of  said 
state,  do  hereby  certify : 

1.  The  name  of  said  corporation  shall  be  The 

Building  and  Loan  Company. 

2.  Said  corporation-is  to  be  located  in 

County,  Ohio,  and  its  principal  business  there  transacted. 

3.  Said  corporation  is  formed  for  the  purpose  of  raising 
money  to   be   loaned  among  its  members,  as  provided  by 
law. 

4.  The  capital  stock  of  said  corporation  shall  be 

dollars,  divided  into shares  of 

dollars  each. 

In  Witness  Whereof,  We  have  hereunto  set  our  hands, 
this day  of 189.. 


STATE  OF  OHIO,        )  c 

County  of f  s 

Personally  appeared  before  me,  the  undersigned,  a  Notary 

Public  within  and  for  said  County,  this day  of 189  , 

the  above-named 

who  each  severally  acknowledged  the  signing  of  the  foregoing 
articles  of  incorporation  to  be  his  free  act  and  deed,  for  the 
uses  and  purposes  therein  mentioned. 

Witness  my  hand  and  official  seal  on  the  day  and  year 
aforesaid. 


Notary  Public. 


258  MANUAL  FOR 

STATE  OF  OHIO,         \cc 
County  of j f s- 

I, ,  Clerk  of  the  Common  Pleas,  within 

and  for  the  County  aforesaid,  do  hereby  certify  that. .  

,  whose  name  is  subscribed  to  the  foregoing 

acknowledgement  as  a  Notary  Public  was  at  the  date  thereof  a 
Notary  Public  in  and  for  said  County,  duly  commissioned  and 
qualified,  and  authorized  as  such  to  take  said  acknowledg- 
ment ;  and  further,  that  I  am  well  acquainted  with  his 
handwriting,  and  believe  that  the  signature  to  said  acknowl- 
edgment is  genuine. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and 

affixed  the  seal  of  said  Court,  at ,  Ohio,  this day  of 

,189.- 


Clerk. 
By Deputy, 


UNITED  STATES  OF  AMERICA,  OHIO,) 
Office  of  the  Secretary  of  State.      \  s 

I, ,  Secretary  of  State  of  the  State  of  Ohio, 

do  hereby  certify  that  the  foregoing  is  a  true  copy  of  the  Arti- 
cles of  Incorporation  of  "  The  Building  and  Loan 

Company  "  filed  in  this  office  on  the. . . .  day  of  . .  189  ,  and 
recorded  in  volume ,  page... .,  of  the  Records  of  Incorpor- 
ation. 

IN  TESTIMONY  WHEREOF,  I  have  hereunto  subscribed  my 

name  and  affixed  my  seal  of  office,  at  Columbus,  the day  of 

,  A.  D.  189  . 


Secretary  of  State. 
By Deputy. 


BUILDING  ASSOCIATIONS.  259 

SUBSCRIPTION    LIST 

OF 

The Building  and  Loan  Association 

of 

We,  the  undersigned,  hereby  agree  to  take  the  amount  of 
shares  of  stock  in  The Building  and  Loan  Associa- 
tion of ,  as  set  opposite  our  names. 

Shares Weekly  Dues Admission  fee 

In  order  to  facilitate  the  permanent  organization  of  said 
association,  we  hereby  waive  the  statutory  notice  of  thirty 
days,  for  holding  of  an  election  for  Board  of  Directors  of  said 
association. 


NAME. 

RESIDENCE. 

SHARES. 

PROXY  ON  STOCK. 

BE  if  KNOWN,  that   I,  the  undersigned  stockholder  in 

The  Building  and  Loan  Association, 

do  hereby  appoint 

true  and  lawful  attorney,  with  power  of  substitution 

and  revocation,  for and  in name.  .,  to  vote  at  the 

meeting  of  stockholders  in  said 

association,  to  be  held  on ,  the 

day  of 189. . 

Done  at on  this day  of 

189-- 


26o  MANUAL  FOR 

BOND  OF  OFFICERS    (OHIO). 

Know  all  Men  by  these  Presents  : 

That .as  principal, 

and  as  sureties, 

are  firmly  held  and  bound  unto  The Building 

and  Loan  Company,  a  corporation  under  the  Laws  of  Ohio, 

in  the  sum  of thousand   ($         ooo.oo)   dollars, 

to  be  paid  to  said  corporation,  its  successors  or  assigns,  for 
which  payment  well  and  truly  to  be  made  we  bind  ourselves, 
our  heirs,  executors,  and  administrators,  jointly  and  severally, 
firmly  by  these  presents.  SEALED  with  our  seals,  dated  the 

day  of one  thousand  eight  hundred  and 

ninety 

The  Condition  of  the  above  obligation  is  such  that  whereas 

the  said was  on  the        .  .day 

of A.  D.  189.  .duly as 

of  said  corporation, 

Now,  therefore,  if  the  said. 

shall  faithfully  perform  all  and  singular  the  duties  incum- 
bent upon  him  as  such  officer  aforesaid  as  prescribed  by  the 
Constitution  and  By-Laws  of  said  corporation  (which  are  made 
part  hereof)  and  according  to  the  orders  of  the  Board  of  Di- 
rectors of  said  corporation,  and  shall,  when  duly  requested  by 
the  Board  of  Directors  of  said  corporation,  turn  over  to  such 
person  or  persons  as  it  may  designate,  all  books,  papers,  re- 
ceipts or  other  documents,  money  or  moneys,  or  other  prop- 
erty of  any  nature  whatsoever,  belonging  to  said  corporation 
or  to  which  the  said  corporation  may  have  the  right  of  pos- 
session, then  these  presents  to  be  void,  otherwise  to  remain 
in  full  force  and  virtue. 

Signed  and  sealed  in  our  presence : 

I      Seal. 

[•     Seal. 

j      Seal. 

NOTE. — Bonds  are  backed  for  filing  as  follows : 

Bond  of as of  The 

Building  and  Loan  Company. 

Attorney. 


BUILDING  ASSOCIATIONS.  261 


MORTGAGE  (OHIO). 


Know  all  Men  by  these  Presents  : 
That  .  . 


in  consideration  of 

dollars,  the  estimated  value  of 

shares  of  its  capital  stock,  advanced  and  paid  to  said 

by 

The Building  and  Loan  Company, 

of ,  Ohio,  a  Corporation  under  the  Laws  of  Ohiot 

the  receipt  of  which  is  hereby  acknowledged,  do  hereby 
GRANT,  BARGAIN,  SELL,  and  CONVEY  to  the  said 
Building  and  Loan  Company,  its  successors  and  assigns,  for-- 

ever,  the  following estate,  situated  in  the  County 

of ,  State  of ,  and  bounded  and  described 

as  follows : 


and  all  the  ESTATE,  TITLE,  and  INTEREST  of  the  said 
grantor  either  in  Law  or  in  Equity,  of,  in,  and  to  the  said 
premises  :  TOGETHER  with  all  the  privileges  and  appurten- 
ances to  the  same  belonging,  and  all  the  rents,  issues,  and 
profits  thereof;  TO  HAVE  AND  TO  HOLD  the  same,  in  fee, 
to  the  use  of  said  Building  and  Loan  Company,  its  successors 
and  assigns,  forever. 

AND  the  said 

for and  for heirs,  executors,  and  administrators, 

do    hereby  COVENANT  with  the  said  Building  and  Loan 

Company,  its  successors  and  assigns,  that  

is  the  true  and  lawful  owner  of  the  said  premises  and  have 
full  power  to  convey  the  same,  and  that  the  title  so  conveyed  is 
CLEAR,  FREE  and  UNINCUMBERED ;  and  further,  that 

will  WARRANT  and  DEFEND  the  same  against  the 

claims  of  all  persons  whomsoever. 


262  MANUAL  FOR 

Provided,  nevertheless,  that,  whereas  the  said 

ha    become  a  member  of  said  Building  and  Loan 

Company,  and  subscribed  to share    therein  to  be  paid 

in  weekly  installments  of per  share,  and  received  in  ad- 
vance from  said  Company  said  $ ,  the  estimated  value  of 

said  share  ,  shall  pay  said  Company,  according  to  the  Consti- 
tution and  By-Laws,  without  demand  therefor  any  fines  and 
assessments  thereby  imposed,  and  said  weekly  installments  of 

per  share  as  premium  on  said  advance,  and  an 

interest  upon  said  $ in  weekly  payments  of  .  .   cents  per 

share  for  the  first  year,  and  thereafter  a  weekly  sum  or  amount 
sufficient  to  keep  the  interest  upon  the  amount  due  at  the  be- 
ginning of  each  year  at  the  rate  of  six  per  cent,  per  annum 
until  the  full  amount  of  said  .  .  shares  shall  have  been  paid, 
with  all  dues,  premium,  interest,  fines,  etc.,  thereon  according 
to  the  Constitution  and  By-Laws,  and  shall  pay  all  taxes,  as- 
sessments, insurance,  ground  rents,  or  charges  of  any  kind 
that  may  become  due  and  payable  on  said  property  ;  and  in 
case  of  default  in  making  any  of  said  payments  for  a  period  of 
ninety  days,  and  a  suit  of  foreclosure  be  brought  therefor, 
then  the  amount  of  the  face  of  this  mortgage,  with  all  arrear- 
ages thereon,  less  the  credits  paid  upon  the  principal,  shall 
become  due  and  payable  at  once,  all  as  prescribed  by  the  said 

Constitution  and  By- Laws ;  and  if  the  said .  .  ; 

shall  comply  with  all  the  foregoing  obligations,  then 

these  presents  shall  be  void. 

In  Witness  Whereof,  the  said 

who  hereby  release       right  and  expectancy  of  dower  in 

said  premises,  ha      hereunto  set   hand   this.... day  of 

in  the  year  of  our  Lord,  one  thousand  eight  hundred 

and  ninety ....  (189    ) 

Signed,  sealed  and  acknowledged  in  presence  of  us : 


BUILDING  ASSOCIATIONS. 


263 


The  State  of  Ohio,  County  of ,  ss. 

Be   it  remembered,  That  on   the day  of . 

in  the  year  of  our  Lord,  one  thousand  eight  hundred  and 

ninety  (189    )  before  me,  the  undersigned,  a  Notary 

Public,  in  and  for  said  County,  personally  came 

the  grantor 

in  the  foregoing  mortgage,  and  acknowledged  the  signing 
and  sealing  thereof  to  be  ....  voluntary  act  and  deed,  for 
the  uses  and  purposes  therein  mentioned. 

In  Testimony  Whereof,  I  have  hereunto  subscribed  my 
name  and  affixed  my  notarial  seal  on  the  day  and  year  afore- 
said, 

Notary  Public, County,  Ohio. 

189-. 

The  within  mortgage  being  fully  paid  and  satisfied,  may  be 
cancelled  off  record,  by  order  of  the  Board  of  Directors. 

The   Building  and  Loan  Company. 

By  President. 

and Secretary. 


fl  J 

"    rr« 


I, 


be 


O    CO 

&  1 


8.55 

O      O 

"* 
•o 


n~ 

l-s 
1 8 

o    <u 


264  MANUAL  FOR 

MORTGAGE     (KENTUCKY). 

KNOW  Aw,  MEN  BY  THESE  PRESENTS  : 

THAT of  the County 

of and  State  of  Kentucky,  for  and  in  consideration 

of dollars  to     h   .  .  .  paid  by  the 

. .    . .  Building  and  Loan  Association,  a  corporation  under  the 

Laws  of  the  State  of  Kentucky,  located  at ,  Ky., 

the  receipt  whereof  is  hereby  acknowledged,  do  . .  hereby 
Grant,  Bargain,  Sell,  Release,  Waive,  and  Convey  unto  the 
said  Association,  its  Successors  and  Assigns  forever,  the  fol- 
lowing Real  Estate,  situated  in  the  County  of 

and  State  of  Kentucky  and  bounded  and  described  as  fol- 
lows, to-wit: 


and  all  the  Right,  Title,  Interest,  and  Estate  of  said  Grantors 
and  each  of  them,  in  and  to  the  said  premises  ;  the  Grantors 
hereby  expressly  waiving,  releasing,  conveying,  and  mortgag- 
ing, to  the  Grantee  all  right  to  Homestead  Exemption  and 
Wife's  right  and  expectancy  of  Dower,  as  well  as  all  other  in- 
terest they  or  either  of  them  may  have  in  and  to  the  said 
property,  and  all  the  rents,  profits,  and  issues  thereof ;  together 
with  all  the  Privileges  and  Appurtenances  to  the  same  belong- 
ing, To  HAVE  and  To  HOI,D  the  same  to  the  said  Associa- 
tion, its  Successors  and  Assigns  forever,  the  Grantor,  . .  .h . . . 
Heirs,  Executors,  and  Administrators  hereby  covenanting 

with  the  Grantee,  its  successors  and  Assigns,  that     the 

true  and  lawful  owuer. .  of  said  premises  and  ha..  .  full 
power  to  convey  the  same,  and  that  the  Title  so  conveyed  is 
clear,  free  and  unincumbered  and  that  they  will  Warrant  and 
Defend  the  same  against  all  legal  and  equitable  claims  what- 
soever ;  and 

WHEREAS,  the  said   is  a  member  of  said 

Association  and  has  heretofore  subscribed  to shares  of 

$500  each  and shares  of  $125  each,  therein,  to  be  paid 

in  weekly  installments  of  $  each  as  dues,  to-wit :  $i  on 

each  $500  share  and  25  cents  on  each  $125  share,  at  the  office 


BUILDING  ASSOCIATIONS.  265 

of  the  Association  without  demand  on day  of  each  and 

every  week  until  the  amount  of  dues  so  paid  in  together  with 
the  dividend  declared  thereon  but  not  withdrawn  shall  amount 
to  the  face  value  of  each  share  ;  and 

WHEREAS,  the  said  Association  has  at  the  special  instance 
and  request  of  said  member.  .,  loaned  and  advanced  to 

h the  sum  of  $  ,  being  the  full  amount  to 

which h  ...  would  be  entitled  upon  said  shares  when 

fully  paid  up  ; 

Now  THEREFORE,  the  conditions  of  this  mortgage  are  such 

that  if  the  said  or  either  of  them,  shall 

pay  or  cause  to  be  paid,  to  such  Association,  its  Successors  or 

Assigns certain  note ...  of  even  date 

herewith,  for  $ ,  and  interest  thereon  ;  said  note  to  be 

paid  in  weekly  installments  of each  as  dues  and  weekly 

installments  of  $  each  as  interest  on  said  loan,  on 

day  of  each  and  every  week,  without  demand  at  the 

office  of  the  Association  during  business  hours  until  said 
shares  become  paid  up  as  aforesaid ;  and  shall  pay  all  fines 
assessed  against  .  .h. . . .  by  said  Association  under  its  Consti- 
tution and  By-I/aws  ;  and  shall  pay  or  cause  to  be  paid  punc- 
tually all  taxes,  assessments,  and  fire  insurance  on  said  prem- 
ises, and  keep  the  same  fully  insured  for  the  benefit  of  said 
Association,  its  Successors  and  Assigns,  and  to  refrain  from 
doing  or  omitting,  or  allowing  to  be  done  or  omitted,  any  act 
or  thing,  on  or  about  said  premises,  whereby  the  security  of 
said  Association  is  diminished  or  endangered  either  by  lessen- 
ing the  value  of  the  property  or  by  impairing  or  tending  to 
impair  the  validity  of  the  insurance  policies  thereon,  and  to 
fulfill  and  conform  to  all  the  requirements  of  the  Constitution 
and  By-Laws  of  said  Association,  during  the  continuance  of 
this  loan,  then  these  presents  shall  be  null  and  void ;  but 

IF  HOWEVER,  the  said or  either  of 

them,  should  fail  to  pay  any  of  said  weekly  installments  of 
dues  or  interest,  in  whole  or  in  part,  as  hereinbefore  stipu- 
lated for,  within  ninety  days  after  the  same  become  due  and 
payable,  or  any  fine,  tax,  assessment,  or  insurance  as  the  same 
may  become  due  and  payable  or  necessary,  or  do  or  omit  to  do 
any  of  the  acts  or  things  hereinbefore  agreed  upon  and  prom- 


266  MANUAL  FOR 

ised,  then  the  whole  of  said  loan  then  remaining  due  shall  at 
once  become  due  and  payable  with  six  per  cent,  per  annum 
interest  thereon  from  such  default  until  fully  paid,  and  this 
Mortgage  may  thereupon  be  foreclosed  for  such  unpaid 
amount  of  said  loan,  and  six  per  cent,  interest  from  the  de- 
fault until  paid. 

In  Witness   Whereof,  the  said  h 

hereunto  set hand  . ,  this day  of 189.  . 

TBSTH: 


COMMONWEALTH  OF  KENTUCKY, 
COUNTY  OF 

I, ,  Clerk  of  the  County  Court  in  and 

for  the  County  aforesaid,  do  hereby  certify  that  this  instru- 
ment of  writing  from   to  The 

Building  and  Loan  Association,  of ,  Ky.,  was 

on   the  day  of 189 . . . ,  produced  to   me    in 

my  office  by  the  parties,  and  was  acknowledged  by  the  said 

to  be  . . .  .h act  and  deed,  and  the  contents  and  effect  of 

the  Instrument  being  explained  to  the  said 


by  me  separately  and  apart  ...  h....said  husband,  ..he 
thereupon  declared  that  .  .  h  ...  said  did  freely  and  voluntar- 
ily execute  and  deliver  the  same  to  be act  and  deed, 

and  consented  that  the  same  might  be  recorded,  and  the  same 
was  this  day  lodged  for  record.  Whereupon  said  instrument 
and  this  certificate  have  been  duly  admitted  to  record  in  my 
office. 

Given  under  my  hand,  this day  of 18.  . 

,  Clerk. 

By Deputy. 


BUILDING  ASSOCIATIONS. 


267 


w 


I 


W3 


§ 

pa 

g 


fe 


MORTGAGE    CLAUSE    FOR    INSURANCE 
POLICIES. 

IT  BEING  HEREBY  UNDERSTOOD  AND  AGREED,  That  this 
insurance,  as  to  the  interest  of  the  Mortgagee  or  Trustee  only 
therein,  shall  not  be  invalidated  by  any  act  or  neglect  of  the 
Mortgagor  or  Owner  of  the  property  insured,  or  by  the  occu- 
pation of  the  premises  for  purposes  more  hazardous  than  are 
permitted  by  the  terms  of  this  Policy.  PROVIDED,  AI^SO,  that 
in  case  the  Mortgagor  or  Owner  neglects  or  refuses  to  pay  any 
premium  due  under  this  Policy,  then,  on  demand,  the  Mort- 
gagee or  Trustee  shall  pay  the  same.  PROVIDED,  Ai,sot  that 
the  Mortgagee  or  Trustee  shall  notify  this  Company  of  any 
change  of  ownership  or  increase  of  hazard  which  shall  come 
to  his  or  her  knowledge,  and  shall  have  permission  for  such 
change  of  ownership  or  increase  of  hazard  duly  indorsed  on 
this  Policy.  AND 'PROVIDED  FURTHER,  That  every  increase 
of  hazard  not  permitted  by  the  Policy  to  the  Mortgagor  or 
Owner  shall  be  paid  for  by  the  Mortgagee  or  Trustee  on  rea- 


268  MANUAL  FOR 

sonable  demand,  and  after  demand  made  by  this  Company 
upon,  and  refusal  by,  the  Mortgagee  or  Owner  to  pay,  accord- 
ing to  the  established  schedule  of  rates.  It  is,  however,  un- 
derstood that  this  Company  reserves  the  right  to  cancel  this 
Policy,  as  stipulated  in  the  printed  conditions  in  said  Policy ; 
and  also,  to  cancel  this  agreement  on  giving  ten  days'  notice 
of  their  intention  to  the  Trustee  or  Mortgagee  named  therein, 
and  from  and  after  the  expiration  of  the  said  ten  days,  this 
agreement  shall  be  null  and  void.  IT  is  FURTHER  AGREED, 
That  in  case  of  any  other  insurance  upon  the  property  hereby 
insured,  then  this  Company  shall  not  be  liable  under  this  Pol- 
icy for  a  greater  portion  of  any  loss  sustained  than  the  sum 
hereby  insured  bears  to  the  whole  amount  of  insurance  on 
said  property,  issued  to  or  held  by  any  party  or  parties  having 
an  insurable  interest  therein.  IT  is  AI,SO  AGREED,  That 
whenever  this  Company  shall  pay  the  Mortgagee  or  Trustee 
any  sum  for  loss  under  this  Policy,  and  shall  claim  that  as  to 
the  Mortgagor  or  Owner,  no  liability  therefor  exists,  it  shall 
at  once,  and  to  the  extent  of  such  payment,  be  legally  subro- 
gated  to  all  the  rights  of  the  party  to  whom  such  payments 
shall  be  made,  under  any  and  all  securities  held  by  such  party 
for  the  payment  of  said  debt.  But  such  subrogation  shall  be 
in  subordination  to  the  claim  of  said  party  for  the  balance  of 
the  debt  so  secured.  Or  said  Company  may,  at  its  option,  pay 
the  said  Mortgagee  or  Trustee  the  whole  debt  so  secured,  with 
all  the  interest  which  may  have  accrued  thereon  to  the  date  of 
such  payment,  and  shall  thereupon  receive  from  the  party  to 
whom  such  payment  shall  be  made  an  assignment  and  trans- 
fer of  said  debt,  with  all  securities  held  by  said  parties  for  the 
payment  thereof. 

This  slip  being  attached  to  Policy  No  . .  of  the 

• INSURANCE  COMPANY,  forms  part  of  said  Policy. 

Dated 

,  Secretary. 


BUILDING  ASSOCIATIONS. 


269 


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270  MANUAL  FOR 

MECHANICS'   LIEN   (OHIO). 

,  Ohio 189.. 

In  consideration  of  one  dollar,  and  other  valuable  consider- 
ations, the  receipt  of  which  is  hereby  acknowledged,   

do  hereby  agree  with 

The   Building  and  Loan  Company 

of County,   Ohio, 

that  will  not  take  a  mechanics'  lien  on  the  real 

estate  of situated 

County,  Ohio,  to  secure  amount  due  or  to  become  due , 

for  material  furnished  or  labor  performed  in  or  about  the 

erection  of 

on  said  real  estate,  under  contract  made  with  the  said 


and hereby  waive  any  right  of  priority  of  lien     

might  have  on  said  real  estate  in  favor  of  said  Company. 

Collateral  Note  for  Loan  on  Pass  Book. 

$ 189.. 

after  date  promise  to  pay 

to  the  order  of 

The  Building  and  Loan  Association, 

of 

Dollars, 

with per  week  interest,  the  same  being per 

cent,  on  the  amount  of  loan,  and  herewith  transfer  my  Pass 

Book  No to  said  Association,  to  be  held  as  collateral 

until  payment  of  this  loan,  said  loan  being  subject  to  the 
Constitution  and  By-Laws  of  the  Association. 

Value  received 

No..  Due.. 


STUB. 
$ 

Date. . . 


No. .  Due 


BUILDING  ASSOCIATIONS.  271 

ATTORNEY'S  REPORT. 

To  the  Board  of  Directors  of 

The Building  and  Loan  Association 

of 

Gentlemen : 

I  find  that  the  title  to  property  of. 


situated 


is  in  the  name  of  said  party,  as  the  same  appears  indexed  of 

Record  in  the  Recorder's  Office  of. .County, 

State  of  Ohio,  subject  however  to  the  following  encumbrance  : 


•The  taxes  are . 
Remarks    . 


Respectfully  submitted, 

Attorney. 

189-. 


272    MANUAL  FOR  BUILDING  ASSOCIATIONS. 


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CHAPTER  XVIII. 


REPORTS. 


THEIR  NECESSITY. 

One  of  the  chief  arguments  in  favor  of  the  build- 
ing association  as  a  saving  society  is  that  it  is  man- 
aged by  the  members  themselves,  and  that  they  may 
therefore  at  all  times  know  exactly  what  is  being  done 
with  their  money,  and  also  the  condition  of  the  asso- 
ciation. Members  can  gain  this  knowledge  only 
through  the  regular  periodical  publication  of  reports. 
The  issuing  of  such  reports,  therefore,  is  one  of  the 
most  important  duties  of  the  officers  of  an  associa- 
tion. Consequently  the  importance  of  preparing  and 
publishing  correct  reports  of  the  business  transac- 
tions— with  itemized  exhibits  of  all  receipts  and  dis- 
bursements, together  with  all  information  as  to  the 
details  of  its  affairs — can  not  be  too  strongly  urged 
upon  the  officers  of  an  association. 

In  order  that  a  report  shall  be  of  the  highest  value 
it  is  necessary  that  not  only  shall  it  be  accurate,  but 
(273) 


274  MANUAL  FOR 

that  it  shall  be  published  at  sufficiently  short  intervals 
to  enable  the  members  to  keep  the  run  of  the  business 
in  their  minds,  and  also  to  give  them  opportunity  to 
take  steps,  when  necessary,  to  correct  any  evils  "that 
may  be  found  to  exist.  Such  reports  should  be  ren- 
dered at  least  once  every  six  months,  and  a  copy 
should  be  placed  in  the  hands  of  each  member. 

If  an  association  is  properly  conducted  and  its 
business  is  in  a  prosperous  condition,  not  only  will 
the  circulation  of  reports  give  satisfaction  to  its  mem- 
bers, but  they  may  be  used  for  advertising  purposes, 
and  in  this  way  additional  members  may  be  brought 
in  and  the  prosperity  and  usefulness  of  the  association 
may  be  increased.  The  knowledge  that  reports  must 
be  printed  and  circulated  at  stated  periods  tends  to 
put  both  officers  and  members  upon  their  mettle,  and 
thus  insures  better  management  for  the  association. 
Every  one  connected  with  an  association  feels  a  just 
pride  in  their  ability  to  present  so  favorable  a 
report. 

On  the  other  hand,  if  an  association  is  not  pros- 
perous, the  sooner  and  the  more  completely  this  fact 
is  made  known  to  its  members,  the  better  it  is  for  all 
concerned.  If  the  evils  found  to  exist  are  curable, 
they  may  be  remedied  promptly,  and  the  association 
be  put  upon  a  better  basis.  If  they  are  incurable, 
steps  may  be  taken  to  wind  up  the  association  before 
its  affairs  become  seriously  involved.  Under  such 
circumstances,  moreover,  the  public  would  be  warned 
by  the  publication  of  an  accurate  report,  and  out- 
siders thus  would  not  become  involved  by  becom- 
ing members. 


BUILDING  ASSOCIATIONS.  275 

LEGAL   REQUIREMENTS. 

So  important  is  this  matter  of  reports  that  many  of 
the  states  have  already  enacted  statutes  requiring  that 
such  reports  shall  be  made,  and  outlining  their  form 
and  character.  To  quote  in  full  the  statutory  provis- 
ions of  the  different  states  which  relate  to  this  subject, 
and  to  enter  into  a  comparison  and  discussion  of 
them,  would  be  foreign  to  the  purpose  of  this  work. 
It  will  be  interesting  and  suggestive,  however,  to  give 
very  briefly  some  of  the  legal  requirements  in  a  few  of 
the  states. 

In  Michigan  every  association  must,  in  Jan- 
uary of  each  year,  make  a  report  in  writing,  verified 
by  the  oaths  of  two  or  more  of  its  officers,  showing  the 
condition  of  its  affairs  at  the  close  of  the  preceding 
year  in  the  following  particulars: 

1 .  The  amount  and  number  of  shares  for  which 
subscriptions  have  been  received. 

2.  The   amount  which  has  been  paid  in   upon 
such  shares  in  dues  and  penalties. 

3.  The  number  of  shares  which  have  been  pur- 
chased, and  the  gross  amount  of  discount  allowed 
upon  the  purchases. 

4.  The  number  of  shares  paid  and  extinguished 
in  other  ways. 

5.  The  gross  amount  of  the  debts  of  the  associa- 
tion. 

This  report  must  be  filed  in  the  office  of  the  clerk 
of  the  court  in  the  county  where  the  association  oper- 
ates. The  attorney  general  of  the  state  may  at  any 
time  require  further  and  detailed  reports,  and  may 
make  personal  investigation  of  books,  papers,  and 
securities. 


276  MANUAL  FOR 

In  Missouri  each  association  must,  in  the  months 
of  January  and  July,  publish  in  one  or  more 
newspapers  in  the  city  or  county  where  it  is  located,  a 
statement,  verified  by  the  oath  of  its  president,  setting 
forth  its  financial  condition  and  the  amount  of  its 
property  and  liabilities.  A  copy  of  this  statement 
must  be  filed  in  the  office  of  the  secretary  of  state.  A 
failure  to  present  such  report  lays  the  president, 
cashier,  or  directors,  of  the  association  liable  to  a  pen- 
alty of  $500  to  the  state. 

In  New  York  each  association  must,  at  the 
close  of  the  first  year's  operations,  and  annually  there- 
after at  the  same  period,  publish  in  at  least  two  news- 
papers where  its  place  of  business  is  located,  a  concise 
statement  verified  by  the  oath  of  its  president  and 
secretary,  showing  its  actual  financial  condition  and 
an  itemized  account  of  its  property  and  liabilities. 
Each  association  also  must  annually,  on  the  first  day 
of  January,  make  a  full  report  in  writing  of  its  affairs 
and  conditions  to  the  superintendent  of  the  banking 
department,  which  must  be  in  such  form  and  contain 
such  statements,  returns  and  information  as  to  its 
affairs,  business,  condition,  obligations  and  resources 
as  the  said  superintendent  may  from  time  to  time 
prescribe  or  require.  The  superintendent  may  also  at 
other  times  demand  such  reports  as  he  may  deem 
proper.  Reports  must  be  verified  by  the  oath  or 
affirmation  of  the  officers  making  them. 

In  Virginia  there  must  be  a  meeting  of  the 
stockholders  on  the  first  Thursday  in  January  each 
year.  The  stockholders  at  this  meeting,  or,  if  they 
fail  to  act,  then  the  president  and  the  directors,  must 


BUILDING  ASSOCIATIONS.  277 

cause  to  be  published,  during  the  month  of  January,  in 
one  or  more  public  newspapers  printed  in  or  nearest 
the  place  of  business  of  such  association,  a  statement, 
verified  by  the  oath  or  affirmation  of  the  president  and 
secretary,  showing  the  actual  financial  condition  of  the 
association  brought  down  to  the  thirty-first  of  Decem- 
ber in  the  preceding  year.  Such  statement  must  ex- 
hibit the  amount  of  money  on  hand,  the  number  of 
shares  redeemed,  the  amount  due  the  association,  its 
liabilities  if  any,  the  value  of  its  property,  and  the  esti- 
mated cash  value  of  each  share  of  its  stock. 

These  extracts  from  the  laws  of  the  four  states 
mentioned  make  sufficiently  clear:  (i)  What 
should  be  the  scope  of  reports ;  (2)  When  they  should 
be  made ;  (3)  How  they  should  be  published. 

PREPARATION  AND  PUBLICATION  OF  REPORTS. 

Whether  the  statutes  require  periodical  reports  to 
be  made  or  not,  such  reports  are  provided  for  in  the 
constitution,  by-laws,  and  rules  of  the  associations 
themselves.  In  these  provisions  the  form  of  the  re- 
port is  outlined  in  a  general  or  specific  way,  and  also  the 
method  of  its  publication.  The  exact  form  in  which 
the  report  of  any  association  shall  be  presented  and 
the  method  of  its  publication  must  therefore  be  deter- 
mined by  the  statutory  requirements  and  by  its  own 
rules.  It  should  be  so  comprehensive  in  scope  and 
elaborate  in  detail  as  to  make  it  self-explanatory.  It 
is  also  very  desirable  that  reports  be  printed,  so  that 
they  may  be  readily  available  for  examination  by  all 
members  and  other  persons  interested. 

The  chief  part  of  the  work  in  the  preparation 


278  MANUAL  FOR 

of  a  report  usually  devolves  upon  the  secretary. 
Promptly,  at  the  close  of  each  fiscal  term,  the  secretary 
should  present  a  properly  formulated  and  tabulated 
report  of  the  business  of  the  entire  term  to  the  direct- 
ors. The  directors  should  refer  it  to  the  auditing 
committee  for  examination  and  verification.  When 
the  directors  and  officers  are  satisfied  that  the  report  is 
correct,  the  secretary,  or  the  secretary  and  the  president 
if  so  required,  should  make  oath  or  affirmation  to  its 
correctness.  It  is  advisable  that  the  report  when  com- 
pleted be  published  in  the  newspapers  or  printed  in 
convenient  form  before  the  meeting  of  the  stockhold- 
ers at  which  it  is  to  be  presented,  so  that  each  member 
may  have  full  opportunity  to  examine  it  and  to  learn 
the  exact  standing  of  the  association  and  the  condition 
of  its  business. 

SECRETARY'S  BALANCE  SHEET. 

An  examination  of  the  reports  of  numerous 
associations  shows  that  the  accounts  most  gener- 
ally carried  by  secretaries  are  as  shown  in  the  follow- 
ing blank  balance  sheet  which  is  printed  here  as  a 
suggestive  guide  for  the  officers  of  new  associa- 
tions. 


BUILDING  ASSOCIATIONS.  279 

Semi-Annual  Report 

of  The Building  and  Loan  Association, 

from to 

RECEIPTS.  DISBURSEMENTS. 

Balance  Cash  on  Hand $ Dues  Account $ 

Dues Mortgage  Account 

Mortgage  Account Note  Account 

Note  Account Loans  on  Books 

Interest    Salaries 

Premiums Rent 

Fines Books    

Admission  Fees Reserve  Fund  Account 

Books Advertising  

Transfer  Fees  Incidental  Expenses 

Paid-up  Stock Paid-up  Stock 

Cash  Over Cash  Short •  •  •  •   

Sundries Sundries  

Dividends 

Balance  in  Cash... 


Total                   $...  Total 

PROFIT.  LOSS. 

Admission  Fees $ Books 

Books Rent 

Interest Salaries 

Premiums Advertising 

Transfer  Fees Incidental  Expenses. 

Fines  Dividend  Declared. . . 

Surplus ReserveFund 

Shortage 


Total  $  Total  $.... 

ASSETS.                                                    LIABILITIES. 
Loans  secured  by  Mortgage  $ Due  to  Members $ 

Books    Dividends 

Stationery 

c   ,.  Reserve  Fund  Account 

Cash  on  Hand. 

Total  $ Total  $""" 

TOTAL  NUMBER  OF  STOCKHOLDERS 

TOTAL  NUMBER  OF  SHARES 

Secretary. 

Approved : 

Auditing  Committee. 


28o  MANUAL  FOR 

SPECIMEN   REPORTS. 

Extracts  from  the  reports  of  a  few  associations  are 
printed  on  the  following  pages.  These  are  not  given 
as  models,  but  simply  as  illustrations  of  the  forms  in 
which  reports  are  presented.  The  reports  given  pos- 
sess some  very  commendable  features. 

While  the  particular  form  which  a  report  shall  take 
is  governed  chiefly  by  the  requirements  of  the  statutes 
and  the  rules  of  the  association,  yet  the  taste  and 
judgment  of  the  secretary  and  the  directors,  custom, 
and  the  circumstances  of  the  association  at  the  time 
the  report  is  made,  may  give  it  special  features  of  in- 
terest. As  will  be  seen,  the  extracts  printed  are  all 
tabulated  matter.  Every  report  should  include,  in 
addition  to.  tabulated  and  summarized  statements  of 
this  character,  such  miscellaneous  statements  and  in- 
formation as  are  of  special  interest  to  the  members  and 
friends  of  the  association.  Many  secretaries  make  their 
reports  of  great  interest  and  value,  and  in  this  way  add 
much  to  the  popularity  and  success  of  their  associations. 

As  already  said,  an  association,  to  attract  member- 
ship and  business,  must  be  advertised  in  a  eommunity> 
and  the  best  method  for  doing  this  is  by  the  general 
circulation  of  well  prepared  reports,  giving  full  and 
explicit  information  in  reference  to  its  business  and 
methods.  Secretaries  and  directors,  in  the  preparation 
and  publication  of  reports,  should  bear  this  advertising 
feature  in  mind,  and  should  arrange  reports  so  as  to  be 
used  in  this  way. 

It  is  quite  evident  from  an  examination  of  this 
subject  that  there  is  necessity  in  most  of  the  states  for 
additional  legislation  in  reference  to  this  matter,  and 
much  room  for  improvement  in  the  practice  of  many 
associations  in  the  way  of  making  reports.* 


BUILDING  ASSOCIATIONS. 


281 


& 


3 


I 


s 

5zT 
I 

i 

«S5 
CO 

«« 

W 


282    MANUAL  FOR  BUILDING  ASSOCIATIONS. 


Seventeenth  Ward  Building  and  Loan  Company, 


CINCINNATI,    OHIO. 


NINTH  ANNUAL  STATEMENT. 


CASH. 

DR. 

CR. 

Balance  Aug.  6,  1890  
Capital  Stock 

1  7,475  5° 
68  080  69 

$53,281  42 
76,662  50 

47  924  65 

12,773  95 

Pass  Book  Loans  
Bills  Payable                        

10,720  95 
36,634  10 

35,147  oo 
995  78 

Profit  and  Loss  
Balance  Aug.  5,  1891          

8,275  37 

250  6  1 

$179,111  26 

$179,111  26 

PROFIT  AND  LOSS. 

DR. 

CR. 

$    I39  33 

$  6,979  69 

709  50 

Fines 

138  97 

Initiation  Fees  

397  oo 

IO  OO 

Pass  Books. 

29  oo 

Cash  Over 

II    21 

Reserve  Fund  

409   56 

Expense.        

S5645 

Contingent  Fund  

199  48 

Shareholders  

7,"9  39 

Balance  Aug.  5,  1891  ,  

37028 

$8,684  93 

$8,684  93 

SHAREHOLDERS. 

DR. 

CR. 

Balance  Aug.  6,  1891             .            ... 

Capital  Stock  

4            « 

68  080  69 

Mortgage  Loans.           .... 

Reserve  Fund 

28   24 

Profit  and  Loss 

Balance  Aug  5  1891 

n 

20,     3  7 

$179,404  22 

$179,404  22 

ASSETS  AND  LIABILITIES. 

DR. 

CR. 

Mortgage  Loans 

Pass  Book  Loans.  ...          .          

Fire  Proof  Safe  
Cash 

210  00 

Bills  Payable 

Shareholders 

i  20  103  78 

199  48 

Undivided  Profits       . 

•770  28 

$122,673  54 

$122,673  54 

Shares  Loaned,  291. 


Shares  Free  Running,  921. 


Total,  1212. 


CHAPTER  XIX. 


BOOKS  AND  BLANKS, 


GENERAL  SUGGESTIONS. 

The  keeping  of  the  accounts  of  the  associations  is 
a  matter  too  extensive  to  be  discussed  in  all  its  details 
here.*  In  point  of  fact  there  is  not  yet  that  uniform- 
ity in  the  methods  of  bookkeeping  in  associations 
which  we  may  certainly  expect  to  see  introduced 
in  the  near  future.  The  improvements  which  have 
appeared  in  the  last  few  years  are  astonishing. 

A  good  illustration  of  the  labor-saving  methods 
which  are  being  introduced  is  seen  in  the  Dues,  or 
Secretary's  Book.  Formerly  postings  were  made  from 
this  book  weekly  (or  monthly)  after  each  meeting. 


*In  R.  Nelson's  "New  Bookkeeping"  will  be  found  a  system 
for  the  keeping  of  building  association  accounts  which  will  be 
of  interest  to  secretaries  and  other  officers  of  associations. 
The  new  edition  of  Accounts  and  Business  by  R.  Nelson  is  a 
work,  which  should  be  in  the  hands  of  every  person  interested 
in  this  subject. 

(283) 


284  MANUAL  FOR 

The  book  is  now  usually  made  with  a  column  set  apart 
for  each  evening's  receipts  and  a  numbered  line  for 
each  member's  book.  The  book  is  arranged  in  sections 
covering  each  quarter  or  half  year,  with  necessary 
rulings  for  totals.  These  totals  are  posted  quarterly 
or  semi-annually.  It  is  easy  to  see  how  much  time 
and  labor  is  saved  and  how  much  the  liability  to  error 
is  lessened  by  the  new  method. 

The  Secretary's  Cash  book  is  also  now  arranged 
with  polyform  columns  and  rulings,  so  that,  as  the  sec- 
retary enters,  meeting  by  meeting,  the  various  receipts 
and  disbursements,  each  upon  its  appropriate  line  in  its 
appropriate  column,  it  is  virtually  posted  to  its  appro- 
priate account.  He  is  thus  able  at  any  time,  without 
the  trouble  of  making  up  a  balance  sheet  or  detailed 
statement,  to  read  off  from  the  page  of  his  cash  book 
the  actual  financial  standing  of  the  association,  the 
amount  of  gain  and  loss  on  each  item,  etc.,  and  at  the 
end  of  the  term,  he  simply  enters  the  entire  amount 
of  each  item  on  its  account  in  the  ledger.  Formerly, 
the  custom  was  to  enter  all  such  items,  meeting  by 
meeting,  in  an  ordinary  cash  book  and  then  to  jour- 
nalize and  then  to  post  them  into  the  ledger — a  very 
burdensome  task  as  secretaries  will  testify. 

In  addition  to  the  improvements  noted  in  these 
two  books  a  large  number  of  other  books  and  various 
blanks  and  forms  have  been  devised  to  save  labor,  to 
secure  accuracy,  and  to  expedite  the  business  of 
associations. 

The  work  of  an  association  in  the  taking  of  dues, 
etc.,  must  be  done  so  quickly,  and  accuracy  in  all 
things  is  so  essential  to  the  success  of  the  associa- 
tion, that  directors  and  officers  should  be  careful  to 


BUILDING  ASSOCIATIONS.  285 

adopt  the  best  system  possible  and  to  provide  them- 
selves with  the  best  and  most  convenient  books  and 
forms.  It  is  especially  desirable  that  the  system 
adopted  should  be  so  simple  and  comprehensive  that  its 
workings  can  be  understood  easily  even  by  uneducated 
and  inexperienced  members.  The  books  and  forms 
should  be  those  that  have  stood  the  test  of  actual 
experience  and  have  given  satisfaction.  In  ordering 
books  care  must  be  taken  that  they  correspond  to 
each  other,  so  that  all  will  fit  in  properly  as  parts  of 
one  system. 

Economy  should  be  practiced  in  the  purchase  of 
books  as  in  all  matters  connected  with  an  association. 
But  it  will  be  found  poor  economy  that  does  not  pro- 
vide the  best  available  books  for  the  keeping  of  the 
accounts  and  records. 

BOOK  ACCOUNT. 

Many  secretaries  keep  a  separate  account  of  the 
blank  books  and  pass  books  used  by  the  association. 
Secretaries  sometimes  have  difficulty  with  this  account. 
The  matter  is  very  simple  when  once  understood. 
The  cost  of  all  books  purchased  should  be  separately 
charged  to  the  book  account,  and  all  receipts  from 
members  for  pass  books  should  be  credited  to  this 
account.  At  the  end  of  each  fiscal  term  a  certain 
percentage,  to  cover  the  cost  of  the  books  in  use 
for  that  term  as  determined  by  the  board  of  directors, 
should  be  charged  to  the  profit  and  loss  account.  The 
following  exhibit  illustrates  how  this  account  may 
be  kept: 


286 


MANUAL  FOR 
BOOK  ACCOUNT. 


Jan.  16 
Jun  29 

Cash  (Acc't  Books) 
"    500  Pass  Books 

P.  &  L.  gain  on  64 
Pass  Books. 

6 
6 

$7200 
55  00 

896 

Jan.  29 

By  cash  f.4  P.  Bks.  25c 
"5%P.&L.Acc'tBks 

By  Bal.  Acc't  Books 
"     "     Pass  Bks.(436) 

7 

$1600 
3  60 

6840 
47  96 

135  96 

135  96 

July  1 

Bal.  Acc't  Books. 
"  436  PassBks.    tl 

9 
9 

$6840 
4796 

PASS  BOOKS. 

The  pass  book  is  the  book  furnished  to  each  mem- 
ber by  an  association,  in  which  are  recorded  the  receipts 
for  his  dues  as  he  pays  them  from  meeting  to  meeting. 
This  book  is  known  under  various  names  as,  "Pass 
Book,"  "Member's  Book,"  "Receipt  Book,"  "Stock 
Book,"  etc.  There  is  so  much  inquiry  in  reference  to 
these  books,  and  such  frequent  difficulty  in  new  asso- 
ciations in  getting  them  in  proper  form,  that  a  full 
description  is  given  here  to  assist  persons  interested  in 
organizing  associations. 

These  books  are  subjected  to  constant  usage  and 
must  last  a  long  time,  since,  usually,  a  period  of  from 
six  to  ten  years  must  elapse  before  the  stock  is  finally 
paid  up.  Pass  books  should  therefore  be  made  of  good 
paper,  in  strong  and  durable  binding,  of  convenient 
size,  and  to  open  easily.  For  the  convenience  of 
officers  and  members,  and  in  order  to  expedite  the 
business  of  the  association,  pass  books  should  be  care- 
fully and  systematically  arranged  and  properly  adapted 
for  their  purpose. 

Pass  books  are  usually  4  to  4^  inches  in  width 
and  6  to  7  inches  in  length.  They  should  contain  the 


BUILDING  ASSOCIATIONS.  287 

constitution  and  by-laws  of  the  association,  a  blank 
certificate  of  stock,  blanks  for  transfers  of  stock,  and 
1 6  leaves — 32  pages — properly  ruled  and  lettered  for 
receipts  for  dues. 

The  certificate  of  stock  is  as  follows : 

The .Building  and  Loan  Association, 

of 

Book  No Certificate  of  Stock. 

THIS  CERTIFIES,  that 

is  entitled  to       . .   shares,  subscribed  in  The 

Building  and  Loan  Association,  which  are  to  be  regulated  and 
controlled  by,  and  which  may  be  transferred  according  to  the 
Constitution  and  By-Laws  of,  said  Association.* 

Admission  Fee,  $ Book, cents. 

Received  Payment, 

Secretary. 

189  . 

The  certificate  of  stock  is  made  to  occupy  one  page 
of  the  Pass  Book.  On  the  back  of  this  certificate 
should  be  printed  two  or  three  blanks  for  the  transfer 
of  shares  as  follows : 

For  value  received,  I  hereby  transfer  to 

all  my  claims,  rights,  and  interest  in 

shares  of  the  capital  stock  of 

The Building  and  Loan  Association, 

of ,  on  this  the day  of 189. 


.Secretary. 


The  leaves  for  receipts  should  be  made  of  good, 
strong  writing  paper,  interleaved  with  light  blotting 
paper.  The  paper  should  be  ruled  with  fifteen  lines 
to  the  page  and  should  have  printed  headings  and 
column  rulings  as  follows  : 
A  09  THB 

*  Some  associations  put  their  seal  011  each  certificate. 


388 


MANUAL  FOR 


DATE. 

DUES. 

Interest. 

Premium 

FINES 

RECEIPT. 

. 

Pass  books  are  sometimes  made  with  twenty-six 
instead  of  fifteen  lines  to  the  page,  but  this  plan  either 
makes  the  book  inconveniently  large  for  carrying  and 
handling,  or  causes  the  rulings  to  be  too  close  for  con- 
venience. 

On  the  front  page  of  the  cover  of  the  book  should 
be  pasted  the  number  of  the  book  and  a  printed  label 
as  follows  : 

SS5 

In  account  with 
The  Building  and  Loan  Association, 


of 


No. 


Shares . 


DEPOSIT  ENVELOPES  AND  SLIPS. 

When  a  member  appears  to  make  his  payments  he 
fills  out  a  deposit  ticket  or  slip  and  encloses  this,  with 
the  exact  amount  of  his  payment,  at  the  proper  place 
in  his  pass  book,  and  hands  it  in.  Some  associations 
use  the  deposit  envelope  instead  of  the  slip,  and  this 
is  much  better.  The  envelope  is  used  exactly  as  the 
slip  except  that  the  money  is  enclosed  and  sealed  up 
in  it,  thus  preventing  its  being  accidentally  dropped 
out  of  the  book  and  causing  loss,  delay,  or  error.  The 
receiving  officer  calls  off  the  number  of  the  pass  book 


BUILDING  ASSOCIATIONS.  289 

and  the  amount  of  money  written  on  the  slip  or  envel- 
ope, and  passes  all  over  to  the  other  members  of  the 
finance  committee,  one  of  whom  counts  the  money, 
and  another  receipts  for  the  dues  in  the  pass  book  and 
returns  it  to  the  owner,  the  slip  or  envelope  being 
placed  on  file.  When  dues  are  received  in  this  man- 
ner it  is  very  easy  to  check  up  the  accounts  at  the 
close  of  the  meeting.  In  some  associations  the  money 
is  simply  enclosed  in  the  pass  book  without  any 
deposit  slip  or  envelope.  Where  there  is  a  large  mem- 
bership, owing  to  the  numerous  payments  and  the 
rush  and  incidental  confusion,  errors  are  likely  to 
occur,  both  in  the  money  paid  in  and  in  the  entries. 
Where  deposit  slips  or  envelopes  are  used  it  is  easy  to 
locate  errors  and  to  make  necessary  corrections. 

Below  are  forms  of  deposit  slips  and  deposit  envel- 
opes: 

DEPOSIT  SLIP. 
The Building  and  I^oan  Association. 

189.. 

Name 

Book  No No.  of  Shares 

For..         ..weeks. 


Dues 

Interest 

Premium 

Fines  

Admission  \ 

or          j- 

Transfer     J 

Book  . 


Total.. 


$ 


cts. 


290 
THE. 


MANUAL  FOR 

..BUILDING  ASSOCIATION 


of... 


DEPOSIT  ENVELOPE. 

NOTE.— All  moneys  handed  in  to  the  Association  for  Credit  on  Member 
thip  Account^  must  be  enclosed  in  one  of  these  envelopes,  and  the  blanks 
properly  filled  out,  to  prevent  mistakes  or  disputes. 


Interest  on  Loan, ...... ,~. 


BUILDING  ASSOCIATIONS.  291 

NECESSARY  BOOKS  AND    FORMS. 

The  following  books  and  forms  will  be  found 
essential  in  an  association  numbering  from  250  to  400 
members : 

500  Pamphlets— Constitution  and  Objects  of  the  Asso- 
ciation. 

500  Pass  Books. 

1   Constitution  and  Signature  Book. 

5000  Deposit  Envelopes  or  Slips. 

First  Secretary's  Dues  or   Receipt  Book. 
Second  Secretary's  Book. 
Treasurer's  Receipt  Book. 
Treasurer's  Cash  Book. 
Secretary's  Itemized  Cash  Book. 
Individual  and   General  Ledger. 
Appraisement  Book. 
Withdrawal  Book. 
1000  Warrants  on  Treasurer — Perforated,  numbered,  and 
bound. 

Blanks  for  Mortgages,  Bonds,  Notes,  etc.,  as  may  be  re- 
quired. 

1  Record  Book  for  the  purpose  of  keeping  the  min- 
utes of  the  meetings  of  the  association  and  of  the  Board 
of  Directors, 

An  association  can  not  well  transact  business  with- 
out possessing  at  least  the  books  and  forms  enum- 
erated above.  But,  in  addition  to  these,  most  associa- 
tions use  various  other  books  and  forms  which  are 
found  of  the  greatest  convenience  and  value  in  the 
transaction  of  their  business.  The  books  and  forms 
mentioned  above,  together  with  many  others,  will  be 
found  described  in  the  list  given  below. 

BUILDING  ASSOCIATION  SUPPLIES. 

The  following  is  a  list,  alphabetically  arranged,  of 
books  and  forms  for  building  associations,  prepared  by 


292  MANUAL  FOR 

S.  Rosenthal  &  Co.,  Cincinnati,  who  have  made  a 
specialty  of  furnishing  building  association  supplies 
for  the  past  twenty-three  years : 

Amendments  to  the  Constitution. — When  amendments  are 
made  to  constitutions  it  is  desirable  that  a  copy  of  the  amend- 
ment be  placed  in  each  member's  pass  book.  These  amend- 
ments are  printed  on  gummed  paper  so  that  a  copy  can  be 
placed  in  each  pass  book. 

Application  Book  (For  Loans]. — Copyright. — Has  columns 
for  date  of  application  for  loan,  name,  amount  of  money 
desired,  how  much  granted,  and  spaces  for  description  of 
property,  reports  of  committees  with  their  signatures,  and 
other  important  remarks. 

Application  Book  (For  Loans),  Combined  with  Attorney's 
Reports. 

Application  Book  (For  Membership}. 

Applications  for  Money  (Dividends).  Bound  in  book  form, 
numbered  and  perforated  with  stubs,  or  plain  without  stubs. 
Furnished  unbound  also. 

Applications  for  Money  (Dividends  and  Withdrawals  Com- 
bined). Bound  or  loose  as  described  above. 

Applications  for  Money  (Withdrawals). — Bound  in  book 
form,  arranged  for  withdrawals  in  full  or  in  part,  numbered 
and  perforated  with  stubs,  or  plain  without  stubs.  Furnished 
unbound  also. 

Appraisement  Book. — For  recording  reports  of  appraising 
committees.  Made  in  all  sizes,  and  arranged  in  conformity 
with  law. 

Balance  Sheets. — Showing  entire  business  of  an  association 
for  a  stated  time. 

Bonds  for  Officers.— (See  form,  page  260.) 

Cash  Book  and  General  Ledger.— Copyright.— All  entries 
to  the  general  accounts  such  as  interest,  premium,  etc.,  are 
posted  when  made,  and,  at  end  of  each  quarter  or  half  year, 
or,  at  any  other  time,  a  complete  balance  can  be  read  off  from 
this.  Considerable  time  is  saved  by  using  this  book. 

Cash  Book  for  Secretaries. — With  special  rulings  and  heads 
and  all  necessary  polyforms  and  divisions. 


BUILDING  ASSOCIATIONS.  2% 

Cash  Book,  H.  B.  Clutes\— Copyright. 

Cash  Booky  H.  L.  Smith's. — Copyright. — Showing  a  com- 
plete summary  of  the  business  of  an  association  for  six  months 
condensed  on  one  sheet. 

Cash  Book  for  Treasurer. — Made  in  convenient  pocket 
form. 

Certificates  of  Paid- Up  Stock.— With  ten  stubs  of  $100 each, 
perforated  and  numbered,  with  laws  pertaining  to  same 
printed  on  back. 

Check  Books  (Bank). 

Circulars. — All  styles  and  sizes 

Collateral  Notes.— (See  forms.) 

Combination  Check  Journal,  S.  T.  Williams's. — Copyright. 

Constitution  Record  Book  with  Members'  Numerical  Re- 
gister and  Ledger  Index  Combined. — Contains  blank  space  for 
recording  constitution  and  amendments  thereto,  with  blanks 
for  signatures  of  members  numbered  in  regular  order,  record 
of  shares  held  by  each  member,  place  of  residence,  pass  book 
number  of  each  member,  and  ledger  folio  of  each  member 
arranged  in  alphabetical  index. 

Deposit  Blanks. — With  or  without  space  for  advertise- 
ments. 

Deposit  Envelopes. — Copyright. — Large  and  small,  per- 
forated. Can  be  printed  on  both  sides,  one  side  with  blanks 
for  deposits,  and  the  other  side  for  advertising  purposes 
These  are  very  useful  and  serve  as  a  check  on  the  receipts. 

Deposit  Fee  Book. — For  keeping  account  of  fees  advanced 
by  members  applying  for  loans. 

Dividend  Books. — For  keeping  dividend  accounts.  The 
members'  numbers  are  printed  in  regular  order,  50  to  a  page, 
with  space  for  names  adjoining,  after  which  follow  spaces  for 
amounts  of  dividends  and  receipts  therefor. 

Dividend,  Report  Record,  and  Reserve  Fund  Book. — Copy- 
right. 

Dividend  Tables. 

Dividend  Warrants. 

Dividend  Withdrawal  Blanks. 

Dodgers. — All  sizes,  English  or  German. 

Dues  Books. — Different  designs  of  weekly,  monthly,  quar- 


294  MANUAL  FOR 

terly  and  semi-annual  dues  books  of  the  most  approved 
patterns. 

Election  Tickets. — And  specially  ruled  Tally  Sheets. — Fur- 
nished to  order. 

Envelopes. — Printed  to  order. 

General  Ledger  and  Cash  Book. 

Index. — Plain  and  voweled. 

Index  (Combination}. — See  Constitution  Record  Book. 

Individual  Ledgers. — Made  to  order  in  any  desired  form. 
We  have  ledgers  arranged  for  posting  every  week,  month,  half- 
year,  etc.  We  make  a  special  Ledger  for  Building  Association 
which  can  be  used  for  quarterly  and  half-yearly  postings.  We 
also  manufacture  ledgers  with  dates  printed  in,  thus  saving 
considerable  time  in  making  entries  for  those  secretaries  who 
post  receipts  at  each  meeting. 

Individual  Ledger,  A.  Vox's. — Copyright. 

Individual  Ledger,  M.  Burgheinfs. — Copyright. 

Letter  Heads. — Printed  to  order. 

Mechanic's  Liens. — (See  forms.) 

Memorials. — Resolutions  of  respect  for  deceased  officers, 
directors,  and  members,  printed  in  neat  and  appropriate 
styles. 

Mortgage  Blanks. — (See  forms.) 

Mortgage  Clause  Blanks. — (See  form.) 

Mortgage,  Lease,  and  Insurance  Record. — Ruled  to  show 
number,  amount  of  loan,  expiration  of  lease,  location  of  prop- 
erty, and  amount  and  expiration  of  insurance,  as  well  as  can- 
cellation. 

Nightly  Receipt  Books  and  Sheets.— (See  Dues  Book.) 

Notes. — Blank,  or  bound  in  book  form,  drawn  in  conformity 
with  law. 

Note  Heads. — Printed  to  order. 

Notices  to  Members. — Printed  to  order. 

Numbers. — In  sets  of  i  to  500,  and  i  to  1000  in  different 
sizes  and  gummed. 

Order  Books. — Made  in  all  sizes,  numbered  and  perforated. 

Pads  (Memorandum).    All  sizes. 

Paid-Up  Stock  Certificates.— (See  Certificates  of  Paid-Up 
Stock.) 


BUILDING  ASSOCIATIONS,  295 

Paid-  Up  Stock  Certificate  Ledger  and  Dividend  Books. 

Pamphlets,  in  English  and  German, — Printed  to  order. 

Pass  Books. 

Posters. — All  sizes  to  order,  for  advertising  sales  of  prop- 
erty, etc. 

Proxy  Blanks. — For  elections  (See  form.) 

Receipts. — Plain  blanks,  or  bound  in  book  form. 

Record  Books. — In  different  styles  with  or  without  index. 
Also  printed  records  to  order. 

Reports. — Semi-annual,  annual,  etc.,  printed  in  any  form. 

Share  Accotmt  Books. 

Seals. 

Secretary  Books. — For  the  First  and  Second  Secretaries. 
The  best  designs  in  this  line.  Special  attention  is  called  to  the 
new  13  and  26  week  books,  made  on  the  most  labor-saving 
plan.  Second  Secretary  books  in  different  styles. 

Show  Cards. — Signs  for  place  of  meeting. 

Solicitor's  Reports. 

Subscription  Blanks. — For  new  associations. 

Subscription  Books. — Stock. 

Tally  Books  and  Blanks. — Generally  used  by  the  Second 
Secretary  or  Finance  Committee. 

Tally  Sheets. — For  elections. 

Transfer  Book.— Stock. 

Treasurer's  Cash  Books. — Made  especially  for  treasurers  in 
convenient  pocket  form. 

Treasurer's  Receipt  Books. — Regular.  Also,  extra  ruled 
and  printed,  with  13  weeks  (three  months,)  receipts  to  a  page, 
and  space  for  date,  signature,  amount,  and  account  for  overs 
and  shortages  in  cash  received. 

Vos's  Individual  Record  and  Ledger. 

Williams'1  s  Building  Association  Books. — All  the  various 
books  copyrighted  by  Mr.  S.  T.  Williams,  the  expert  account- 
ant. 

Williams' s  26  Weekly  Dues  Register. — For  entering  dues. 

Withdrawal  Blanks. — In  pads  or  book  form. 


APPENDIX. 


The  following  forms  for  constitution,  by-laws,  and 
rules,  have  been  compiled  from  those  in  use  by  sever- 
al associations  in  successful  operation,  and  embody 
the  best  features  of  all  of  them.  The  provisions  here 
given  have  therefore  been  thoroughly  tested  in  prac- 
tice. However,  it  is  not  to  be  expected  that  these  forms 
shall  be  followed  literally  by  any  association.  Some 
modification  to  meet  local  or  other  requirements  must 
necessarily  vary  the  form  and  text  in  nearly  every 
instance.  Much  care  and  intelligence  should  be  em- 
ployed in  filling  the  several  blanks  properly  in  order 
that  the  association  may  be  established  on  a  practical 
working  basis.* 


*  In  New  Jersey  associations  are  required  to  incorporate  in 
full  in  their  constitution  all  the  provisions  of  the  statutes  under 
which  they  act.    All  such  special  provisions  in  the  statutes  of 
any  state,  must,  of  course,  be  carefully  observed. 
(296) 


APPENDIX.  297 

CONSTITUTION. 

ARTICLE  I. 
Name. 

The  name  of  this  association  shall  be  The  

Building  and  Loan  Association  *  of (city) 

(state),  and  its  place  of  business  shall  be  in  the 

(city  or  town)  of County 

ARTICLE  II. 

Object. 

The  object  of  this  association  shall  be  to  afford  to  its  mem- 
bers an  opportunity  to  invest  their  savings  safely  at  a  good 
rate  of  interest,  and  also  to  accumulate  or  to  borrow  money 
for  use  in  purchasing  real  estate,  buying,  building  or  re- 
pairing houses,  and  for  such  other  purposes  as  are  author- 
ized by  law. 

ARTICLE  III. 

Capital  Stock. 

The  capital  stock  of  this  association  shall  be     

dollars  ($ ),  divided  into shares  of. ...    

dollars  ($ )  each,  which  shall  be  paid  in  in  weekly  (or 

monthly)  installments  of on  each  share. 

ARTICLE  IV. 
Membership. 

Any  person  or  corporation,  qualified  by  law,t  may  become 
a  member  of  this  association,  by  subscribing  for  one  or  more 
shares  of  its  stock  and  shall  be  entitled  to  all  the  benefits  and 

*  The  Ohio  statutes  require  that  the  name  of  every  corporation  shall  be- 
gin-with  the  word  "The"  and  end  with  the  word  "Company".  Special 
restrictions  in  reference  to  the  names  of  associations  are  found  m  the 
statutes  of  some  of  the  other  states.  Thus,  in  Massachusets,  the  words 
"Co-operative  Saving  Fund  and  Loan  Association",  must  form  part  of  the 
name  of  each  association,  while  in  Maryland,  the  name  of  the  city  or  t9wn 
and  county  where  the  association  is  formed,  must  be  part  of  the  title. 
Wherever  an  association  is  organized  the  statutory  requirements  must 
always  be  met. 

t  The  laws  in  the  different  states  determine  what  persons  and  corpora- 
tions shall  be  adjudged  capable  of  making  contracts.  In  some  states  the 
special  laws  under  which  associations  operate  confer  the  right  to  become 
members  upon  persons  who,  under  the  general  laws  would  be  debarred 
from  the  privilege,  such,  for  instance,  as  minors  and  married  women. 


298  APPENDIX. 

privileges,  and  be  subject  to  all  the  duties  of  a  member  as 
provided  in  this  constitution,  and  in  the  rules  and  by-laws 
established  hereunder. 

ARTICLE  V. 
Meetings  and  Elections. 

SECTION  i.  There  shall  be  held  an  annual  corporate  meet- 
ing of  this  association,  on  the day  of in 

each  year  at o'clock  p.  M.  for  the  following  objects  : 

1.  The  election  of  officers. 

2.  The  reading  of  annual  reports. 

3.  The  transaction  of  such  other  business  as  is  provided 
for  hereinafter,  or  as  may  be  legally  brought  before   said 
meeting. 

SECTION  2.  Two  weeks  previous  to  the  annual  meeting  the 
board  of  directors  shall  appoint  a  committee  of  five  share- 
holders, outside  of  their  own  number,  who  shall  nominate  a 
list  of  candidates  equal  to  double  [or  treble]  the  number  of  va- 
cancies that  will  arise  in  the  directory.  Tickets  containing  the 
names  of  these  candidates  shall  be  provided  by  said  committee 
for  the  use  of  the  members  at  the  election.  Each  member 
shall  be  entitled  to  one  vote  for  each  share  of  stock  owned  by 

him.  The  election  shall  be  by  ballot,  and  the persons 

receiving  the  greatest  number  of  votes  shall  be  declared  elec- 
ted as  directors  for  the  term  of *  The 

polls  shall  be  opened  at o'clock  P.  M.  and  closed  at 

. . .  .o'clock  p.  M. 

SECTION  3.  Regular  weekly  meetings!  of  the  members  for 
the  payment  of  dues,  the  loaning  of  money,  and  the  transaction 
of  the  other  business  of  the  association,  shall  be  held  at  such 
times  and  places  as  the  directors  may  designate.  If  the  time  or 
place  of  meeting  is  changed,  the  directors  shall  give  public 
notice  to  all  the  members  of  such  change,  at  least  one  week 


*  Directors  are  elected  generally  for  the  term  of  one  year.  In  that  case 
the  blank  should  be  filled  with  the  words  "one  year".  Some  associations 
however,  prefer  to  retain  part  of  their  directors  (say  one-half  or  two-thirds) 
to  hold  over.  In  that  case,  only  one-half  or  one-third  of  the  directors  are 
elected  annualy,  and  then  this  blank  should  be  filled  with  the  words  "two 
years"  or  "three  years"  as  the  case  may  be.  In  case  of  a  tie  vote  the  elec- 
tion usually  is  decided  by  lot. 

f  Or  bi-weekly,  or  monthly,  as  the  case  may  be. 


APPENDIX.  299 

previous  thereto,  by  advertisement  in  at  least  one  newspaper 

of  general  circulation  in  the  county  of .  .  ,  or  by 

sending  a  special  notice  to  each  member  by  mail  or  otherwise. 
The  directors  shall  hold  their  regular  business  meetings  at  the 
same  times  and  places  fixed  for  the  regular  meetings  of  the 
members. 

SECTION  4.  Special  corporate  meetings  shall  be  called  by 
the  president  at  any  time  upon  the  written  request  of  ...  mem- 
bers ;  and  the  notification  to  the  members  shall  be  in  the  same 
manner  as  above  provided  for  a  change  in  the  regular  weekly 
meetings. 

SECTION  5.  Members  may  be  represented  and  may  vote 
in  the  corporate  meetings  by  proxy.* 

ARTICLE  VI. 
Officers  and  Their  Powers. 

SECTION  i.  The  power  to  transact  the  business  of  this  asso- 
ciation shall  be  vested  in  a  board  of  ....  directors,  a  majority 
of  whom  shall  constitute  a  quorum.  They  may  enact  and 
amend  by-laws  and  rules  for  their  own  government  and  for 
the  government  of  the  business  of  the  association.  They  may 
also  fill  vacancies  in  the  board,  provided  such  vacancies  do  not 
exceed  one-half  of  the  membership  of  the  board.  When  the 
vacancies  exceed  one-half  of  the  membership  the  remaining 
members  shall  call  a  special  corporate  meeting  of  the  asso- 
ciation at  which  an  election  to  fill  the  vacancies  shall  be  held 
under  the  prescribed  rules. 

SECTION  2.  The  board  of  directors  shall  enter  upon  their 
duties  at  the  first  regular  meeting  after  their  election.  They 
shall  organize  by  electing  from  their  own  number  a  president, 
a  vice-president,  a  treasurer,  a  secretary,  and  as  many  assist- 
ant secretaries  as  they  may  deem  necessary.! 

ARTICLE  VII. 
Amendments. 

SECTION  i.  All  proposed  amendments  to  this  constitution 
shall  be  submitted  in  writing  to  the  board  of  directors  for 


*  In  the  state  of  Michigan  proxies  are  prohibited  by  law. 
t  At  the  organization  of  each  new  board  the  oath  of  office  should  be 
administered  by  some  person  duly  qualified  to  administer  oaths. 


300  APPENDIX. 

approval.  If  approved  by  the  directors  the  proposed  amend- 
ments shall  be  printed  and  submitted  to  the  shareholders  for 
ratification  at  the  annual  meeting  or  at  a  special  meeting  called 
for  that  purpose,  and,  with  the  concurrence  of  two-thirds  of 
the  members  present  and  voting  at  such  meeting,  the  propos- 
ed amendments  shall  be  declared  adopted. 

SECTION  2.  At  least  one  week's  notice  of  the  corporate 
meeting  at  which  a  proposed  amendment  is  to  be  submitted  to 
the  shareholders  shall  be  given  through  the  mail  or  by  adver- 
tisement in  some  newspaper  or  newspapers  of  general  circu- 
lation in county  

ARTICLE  VIII. 
Dissolution. 

This  association  may  be  dissolved  by  agreement  of  its 
members.  A  motion  to  dissolve  the  association,  in  writing  and 
signed  by  shareholders  representing  at  least  two-thirds  of  the 
shares,  must  be  presented  at  a  regular  meeting  of  the  board 
of  directors,  and  must  be  read  by  the  secretary  at  three  con- 
secutive meetings.  When  read  the  second  time  the  board  of 
directors  shall  by  advertising  in  papers  of  general  circulation 

in county ,  call  a  special  meeting  of 

the  shareholders  to  consider  it.  If  in  said  meeting  three- 
fourths  of  all  the  shares  shall  vote  by  written  ballot  for  a 
dissolution  of  the  association,  then  the  association  shall  be 
dissolved.  The  board  of  directors  shall  then  take  the  neces- 
sary legal  steps  to  wind  up  the  affairs  of  the  association. 


BY-LAWS. 


Officers  and  their  Duties. 

SECTION  I.  The  president  shall  preside  at  all  the  meetings 
of  the  directors  and  shall  perform  the  duties  usually  pertain- 
ing to  his  office.  He  shall  sign  all  orders  issued  by  the  board 
of  directors,  and  attend  to  the  proper  and  prompt  recording  of 
the'  mortgages  and  other  documents  which  require  a  public 
record.  He  shall  be  the  custodian  of  all  the  bonds  given  by 
the  officers  except  his  own  which  shall  be  held  by  the  secre- 
tary. 


APPENDIX.  301 

SECTION  2.  The  vice-president  shall  perform  the  duties  of 
president  in  the  absence  or  disability  of  the  latter. 

SECTION  3.  The  treasurer  shall  receive  all  the  moneys 
paid  to  the  association,  giving  his  receipt  therefor,  and  shall 
pay  all  orders  issued  by  the  board  of  directors  and  signed  by 
the  president  and  secretary.  At  the  end  of  his  term,  or  at  any 
time  the  directors  may  order,  he  shall  deliver  to  his  successor 
in  office  all  books,  papers,  money,  and  other  property  of  the 
association  in  his  possession. 

SECTION  4.  The  secretary  shall  record  the  proceedings  of 
the  meetings  of  the  association  and  of  the  board  of  directors. 
He  shall  keep  an  accurate  account  of  the  financial  transactions 
of  the  association.  At  the  close  of  the  fiscal  year,  and  at  such 
other  times  as  the  directors  may  order,  he  shall  present  to  the 
association  full  reports  of  the  business  transacted  during  the 
year  together  with  an  itemized  statement  of  the  profits  and 
losses  and  of  the  assets  and  liabilities  of  the  association.  He 
shall  have  the  custody  of  all  the  books  and  papers  of  the  asso- 
ciation not  otherwise  provided  for,  subject  to  the  order  of  the 
board  of  directors,  and  shall  deliver  the  same  to  his  successor 
in  office. 

SECTION  5.  The  assistant  secretaries  shall  assist  the  secre- 
tary in  the  discharge  of  his  duties  as  he  shall  direct.  In  the 
absence  or  disability  of  the  secretary  the  assistants  shall  fill 
his  place  in  the  order  of  their  priority. 

SECTroN  6.  The  directors  shall  appoint  an  attorney  for  the 
association  whose  duty  it  shall  be  to  attend  to  all  legal  busi- 
ness referred  to  him  by  the  directors,  including  the  examina- 
tion of  titles  and  the  preparation  of  mortgages.  He  shall  make 
a  written  report  to  the  directors  of  the  facts  in  the  case  upon 
completion  of  each  duty  assigned  to  him. 

SECTION  7.  The  compensation  to  be  paid  to  officers  of  the 
association  for  their  services  shall  be  determined  by  the  board 
of  directors. 

SECTION  8.  The  officers  of  the  association  shall  give  bonds 
with  two  approved  sureties  in  the  following  sums  for  the 

faithful  discharge  of  their  duties ;  president, dollars, 

($  ),  the  vice-president, dollars  ($  ),  the  secretary, 

dollars  ($  ),  each  assistant  secretary,  dollars, 


302  APPENDIX. 

($        ),the  treasurer, dollars  ($        ),  and  the  attorney, 

dollars  ($        ). 

Committees. 

SECTION  9.  The  directors  shall  appoint  from  their  own 
number  regular  standing  committees  as  follows :  a  finance 

committee  of members,  and  an  appraising  committee  of 

members ;  they  shall  also  appoint  an  auditing  committee 

of  .  .  shareholders  who  shall  not  be  directors.  They  shall 
also  appoint  from  time  to  time  such  special  committees  as  they 
may  deem  necessary  and  expedient. 

SECTION  10.  It  shall  be  the  duty  of  the  finance  committee 
to  superintend  the  collection  of  the  dues  of  members,  and  of  all 
other  moneys  due  the  association,  and  to  witness  the  delivery 
of  the  same  to  the  treasurer. 

SECTION  u.  It  shall  be  the  duty  of  the  appraising  com- 
mittee to  visit  the  premises  and  ascertain  the  cash  value  of  all 
real  estate  offered  as  security  for  loans,  and  to  report  the  same 
in  writing  to  the  board  of  directors  at  their  first  meeting  after 
the  appraisement  is  made. 

SECTION  12.  It  shall  be  the  duty  of  the  auditing  committee 
to  examine  and  to  audit  the  accounts  and  papers  of  the  associ- 
ation from  time  to  time  as  they  may  deem  necessary  or  may 
be  ordered  by  the  board  of  directors,  and  to  verify  the  official 
reports  and  financial  statements  of  the  secretary.  The  com- 
mittee must  present  all  reports  in  writing. 

SECTION  13.  The  board  of  directors  shall  determine  the 
amount  of  compensation  to  be  paid  to  members  of  committees 
for  services  rendered. 

Time  of  Meetings. 

SECTION  14.  The  regular  weekly  meeting  for  the  payment 
of  dues,  interest,  premiums,  fines,  etc.,  the  loaning  of  money, 
and  the  other  financial  transactions  of  the  association  shall  be 

held  every evening  at  such  place  as  may  from 

time  to  time  be  designated. 

SECTION  15.  The  time  of  meeting  from  April  to  September 
inclusive  shall  be  between  the  hours  of  8  and  9  o'clock  p.  m., 
and  from  October  to  March  inclusive  from  7:30  to  8:30  o'clock 
p.  m. 


APPENDIX.  303 

Payments. 

SECTION  16.  All  moneys  due  to  the  association  shall  be  paid 
at  the  regular  meetings  to  the  finance  committee,  who  shall 
give  proper  receipt  for  all  money  paid  in. 

SECTION  17.  Bach  member  must  pay  an  admission  fee  of 
cents  for  each  share, cents  for  a  pass  book  or  a  paid- 
up  stock  certificate,  and  dues  of .  . .  per  share 

per  week.    No  member  shall  hold  in  his  own  right  more  than 
,   shares  of  stock  in  this  association,  and  no  transfer 
shall  be  valid  unless  made  upon  the  books  of  the  association 
and  after  payment  of  a  transfer  fee  of cents  per  share. 

SECTION  18.  Every  member  must  continue  to  pay  his 
dues  until  his  accumulated  payments  and  the  dividends  de- 
clared thereon  and  remaining  undrawn,  together  shall  equal 
the  full  value  of  his  stock,  at  which  time  the  member  shall  be 
entitled  to  receive  the  amount  thereof  in  cash,  and  a  pro  rata 
share  of  the  reserve  fund. 

Paid-up  Stock. 

SECTION  19.  Should  any  member  desire  to  pay  in  the  full 
face  value  of  his  shares  at  the  time  of  subscribing  for  the  same, 
or  at  any  time  thereafter,  or  should  any  member  whose  shares 
have  become  paid-up  as  provided  in  the  preceding  section, 
prefer  to  allow  the  money  due  thereon  to  remain  in  the  pos- 
session of  the  association,  the  board  of  directors  may,  if  they 
think  best,  accept  said  money  and  issue  to  such  members  cer- 
tificates of  paid-up  stock  for  the  share  or  shares  so  paid  up. 

SECTION  20.  Upon  the  paid-up  stock  for  which  such  cer- 
tificates are  issued,  the  members  shall  not  be  required  to  pay 
weekly  dues,  and  shall  be  entitled  to  receive  in  cash  the 
amount  of  all  dividends  declared  theron.  But  such  stock,  ex- 
cept as  is  provided  in  the  next  section,  shall  be  governed  by 
the  same  rules  as  to  withdrawal  and  otherwise,  and  be  subject 
to  the  same  liabilities  as  other  stock. 

SECTION  21.  If  at  any  twenty-sixth  or  fifty-second  meet- 
ing of  the  business  year  there  shall  be  more  money  in  the 
treasury  than  will  satisfy  the  applications  for  loans,  the  board 
of  directors  may  require  any  and  all  holders  of  certificates  of 
paid-up  stock,  in  the  reverse  order  in  which  they  were  issued, 
to  surrender  such  certificates  and  to  receive  therefor  the 


304  APPENDIX. 

amounts  for  which  they  were  issued,  together  with  all  divi- 
dends declared  and  still  remaining  unpaid  thereon,  and  no 
holder  of  such  paid-up  stock  shall  be  entitled  to  dividends 
thereon  from  and  after  the  time  the  board  shall  so  order  its 
surrender. 

Borrowing  Members. 

SECTION  22.     Every  shareholder  shall  be  entitled  to  a  loan 

of ....  dollars  for  each  share  subscribed,  upon 

securing  the  same  as  hereinafter  provided. 

SECTION  23.  At  each  weekly  meeting,  at  the  discretion  of 
the  directors,  precedence  in  borrowing  such  money  as  may  be 
on  hand  for  loan  shall  be  offered  openly  for  sale  and  be  sold  to 
the  member  who  bids  the  highest  premium  therefor,  which 
premium  must  be  paid  in  weekly  installments  during  the  con- 
tinuance of  the  loan. 

SECTION  24.  Interest  and  premiums  on  loans  shall  be  pay- 
able pro  rata  as  soon  as  any  part  of  the  loaned  money  is  ready 
to  be  paid  to  the  borrower. 

SECTION  25.  Those  who  borrow  money  must  make  a  de- 
posit of  twenty  ($20.00)  dollars  with  the  president  to  cover 
expenses  to  pay  for  appraisers',  attorney's,  and  recorder's  fees, 
etc.  Any  balance  of  this  amount  remaining  after  all  fees  are 
paid  shall  be  returned  to  the  owner. 

SECTION  26.  The  board  of  directors  shall  have  the  right  to 
reject  any  and  all  applications  for  loans,  having  regard  as  well 
to  the  character  of  the  applicants  as  to  the  security  offered. 

SECTION  27.  All  loans  shall  bear  interest  at  the  rate  of 
per  cent,  per  annum,  and  shall  be  payable  in  weekly  install- 
ments, and  rebatable  annually. 

Securities. 

SECTION  28.  Any  member  borrowing  money  shall  secure 
the  payment  thereof  by  executing  a  sufficient  mortgage  on 

real  estate  in ,  said  mortgage  to  be  in  force 

until  the  dues  paid  in  and  the  declared  profits  credited  thereon 

shall  amount  to dollars  per  share,  whereupon 

the  mortgage  shall  be  cancelled. 

SECTION  29.  Security  by  mortgage  upon  real  estate  in  fee 
simple,  perpetual  leasehold,  or  leasehold  estate  with  the  privi- 


APPENDIX.  305 

lege  of  purchase  after  a  certain  period  and  at  a  fixed  price,  or 

leasehold  for  not  less  than years,  shall  be  accepted 

at  the  discretion  of  the  board  of  directors. 

SECTION  30.  No  loan  shall  be  made  for  more  than  two- 
thirds  of  the  appraised  value  of  the  mortgaged  property ;  and 
when  the  ground  alone  is  not  sufficient  any  buildings  thereon 
must  be  insured  to  the  satisfaction  of  the  board  of  directors, 
and  the  policies  assigned  to  the  association  as  collateral  se- 
curity. 

SECTION  31.  All  taxes  and  assesments,  fire  insurance  pol- 
icies, ground  rents,  etc.,  must  be  paid  promptly  by  the  mort- 
gagor, and  it  shall  be  the  duty  of  such  mortgagor  to  present  to 
the  directors  the  proper  receipts  therefor  at  the  meeting  next 
following  the  date  when  such  payments  become  due.  Failure 
to  present  such  receipts  as  required  shall  be  liable  to  a  fine  of 

,  and  such  other  action  as  the  board  of  directors 

may  deem  necessary. 

SECTION  32.  Every  member  who  borrows  money  on 
mortgage  security  and  transfers  to  the  association  the  policy 
or  policies  of  insurance  on  the  improvements  of  said  mort- 
gaged premises  as  collateral  security,  who  shall  contemplate 
making  any  alteration  in  or  addition  to  the  insured  buildings, 
that  may  in  any  way  impair,  or  tend  to  impair,  the  validity  of 
such  insurance  policy,  or  policies,  shall  report  the  same  at  a 
regular  meeting,  before  the  beginning  of  such  change,  and  in 

default  thereof  shall  be  fined  in  the  sum  of 

for  each  and  every  such  omission. 

Collateral  Securities. 

SECTION  33.  Any  member  of  the  association  to  whom 
money  has  not  been  advanced  on  mortgage  security  may  re- 
ceive a  loan  in  any  sum  not  exceeding  nine-tenths  of  the 
amount  paid  in  by  him,  on  giving  a  note  for  such  amount,  and 
transferring  his  pass  book  to  the  association,  to  be  held  as 
collateral  security  until  the  full  amount  of  such  loan,  with  all 
dues  thereon,  shall  be  paid. 

SECTION  34.  Any  person  borrowing  money  as  provided  in 
the  foregoing  section,  shall  pay  for  the  same  in  weekly  install- 
ments as  follows : 


306  APPENDIX. 

For  any  sum  from  $  i  oo  to  $  25  oo cents  per  week. 

"      "        "        "      25  oo  to      5000....      " 
"      "        "        "      50  oo  to      75  oo. ...      " 
"      "        "        "      75  oo  to    loo  oo. . . .      " 
and  so  on  at  the  rate  of cents  for  every  twenty-five  dol- 
lars or  part  thereof. 

SECTION  35.  The  members  so  borrowing  shall  continue  to 
pay  their  dues  and  interest  on  the  shares  subscribed,  the 
same  as  other  borrowing  or  depositing  members. 

SECTION  36.  In  case  any  such  borrowing  member  shall 
have  failed  to  return  the  amount  borrowed  and  the  weekly 
dues  and  interest  thereon  at  the  expiration  of  one  year,  his 
pass  book  shall  be  forfeited  to  the  association,  his  member- 
ship «aficelled,  and  the  sum  of  money  loaned,  the  unpaid 
weekly  installments  thereon,  and  fines  for  the  non-payment 
of  dues,  shall  be  deducted  from  the  full  amount  of  dues  paid 
in,  and  the  balance  paid  to  such  person,  whose  connection  with 
the  association  shall  thus  terminate. 

Fines  and  Penalties. 

SECTION  37.  Any  member  who  has  borrowed  money  on 
mortgage  security  from  the  association,  who  shall  neglect  to 

make  any  of  his  payments  for  the  space  of weeks,  shall 

be  liable  to  an  action  at  law  for  the  recovery  thereof,  and  the 
directors  shall  be  authorized  by  virtue  of  the  mortgage  deed 
to  collect  all  dues,  interest,  premium,  and  fines  due  and  owing 
the  association. 

SECTION  38.  If  any  member  neglects  to  bring  his  pass  book 
to  the  weekly  meetings,  or  to  pay  dues  at  the  specified  time, 
he  shall  be  fined 

SECTION  39.  The  board  of  directors  shall  have  the  power 
to  remit  any  fine  which  in  their  judgment  has  been  unjustly 
imposed. 

SECTION  40.  In  case  the  secretary  should  be  unable  to  at- 
tend the  meetings  he  shall  be  required  to  deliver  or  cause  to 
be  delivered  the  books  and  papers  of  his  office  to  the  finance 
committee,  subject  to  a  fine  of for  each  offense. 

SECTION  41.  If  a  member  of  the  board  of  directors  be  ab- 
sent from  three  consecutive  meetings  without  leave  or  proper 
excuse,  then  the  place  may  be  declared  vacant,  and  the  board 
may  fill  the  vacancy. 


APPENDIX.  307 

Cancellation  of  Mortgages. 

SECTION  42.  If  any  member  desires  to  cancel  his  mortgage 
to  the  association  he  may  do  so  by  paying  to  the  association 
the  amount  due  on  the  mortgage  as  follows : 

The  face  value  of  the  mortgage  ($ per  share), 

the  premium  remaining  due  and  unpaid  for  the  term  of  one 
year,  the  interest  remaining  unpaid,  and  all  fines  for  non- 
payment of  dues,  less  the  dues  paid  in  and  the  profits  credited, 

and  also  a  fee  of    to  the  president  for  cancelling 

the  mortgage. 

Dividends. 

SECTION  43.     The  board  of  directors  shall,  on  the day 

of. ......  and  ....  of  each  year,  declare  such  dividends  as 

may  remain  from  the  earnings  of  the  association,  after  deduct- 
ing therefrom  all  expenses  and  losses,  and  such  sum  as  they 
may  reserve  for  the  fund  for  the  payment  of  contingent 
losses. 

SECTION  44.  The  dividend  so  declared  shall  be  distributed 
amo4ig  all  the  members  pro  rata  in  proportion  to  the  amount 
standing  to  the  credit  of  each  member  on  his  stock  at  the  be- 
ginning of  the  term,  in  addition  to  the  average  amount  paid  in 
by  him  during  the  time,  less  withdrawals. 

SECTION  45.  At  the  time  of  issuing  paid-up  stock  the  board 
of  directors  may  limit  the  rate  of  dividends  which  shall  be 
paid  thereon,  and  the  rate  to  which  the  same  is  limited  shall 
be  written  or  printed  on  the  back  of  the  certificate. 

SECTION  46.     The  dividends  declared  shall  be  credited  on 

the  pass  books  of  the  members  at  the  first  meeting  in     

and of  each  year,  and  holders  of  certificates  of  paid- 
up  stock  shall  be  entitled  to  receive  the  dividends  thereon  in 

cash,  on  the  of and  at 

the  office  of  the  association. 

Withdrawals. 

SECTION  47.  Depositing  members  may  withdraw  from  the 
association  at  any  time  by  giving  one  week's  notice  to  the 
board  of  directors,  and  the  liability  to  pay  further  dues  and 
the  right  to  dividends  shall  cease  with  such  notice.  The  with- 
drawing member  shall  be  entitled  to  receive  all  payments  made 


3o8  APPENDIX. 

on  the  stock  withdrawn,  and  all  dividends  declared  thereon 
up  to  the  time  of  notice,  less  his  pro  rata  share  of  all  losses. 
Provided,  however,  that  should  the  applications  for  with- 
drawal at  any  time  exceed  the  weekly  receipts,  such  appli- 
cations shall  be  filed  in  the  order  in  which  they  are  received, 
and  paid  in  the  order  in  which  they  are  filed,  as  fast  as  the  re- 
ceipts of  the  association  will  pay  them. 

SECTION  48.  All  shares  withdrawn  or  forfeited,  and  all 
shares  paid  up  and  the  money  thereon  withdrawn,  and  also 
all  shares  on  which,  loans  have  been  taken  and  cancelled  or 
paid  up,  shall  revert  to  and  become  the  property  of  the  associ- 
ation and  may  be  reissued  by  the  board  of  directors. 

SECTION  49.  Members  who  have  borrowed  money  on  real 
estate  may  transfer  their  shares  by  selling  and  transferring 
their  mortgaged  property  and  shares  to  one  and  the  same  per- 
son, on  the  condition  that  the  purchaser  becomes  a  member  of 
the  association  by  signing  the  constitution  and  agreeing  to 
perform  all  the  duties  of  the  seller. 

SECTION  50.  Any  member  to  whom  money  has  not  been 
advanced  on  mortgage  security  may  withdraw  any  part  of  the 
amount  to  his  credit  on  the  books  of  the  association,  and  upon 
the  amount  so  withdrawn  he  shall  not  be  required  to  pay  any 
interest,  and  he  shall  not  receive  any  dividends  on  said  with- 
drawn amount. 

Death  of  Members. 

SECTION  51.  Upon  the  death  of  any  member  his  legal 
representatives  shall  be  invested  with  all  his  rights  and  liabil- 
ities. 

Amendments. 

SECTION  52.  These  by-laws  may  be  amended  at  any  reg- 
ular meeting  of  the  board  of  directors  by  a  two-thirds  vote  of 
the  members  thereof,  but  all  proposals  to  amend  the  same 
shall  be  made  in  writing  at  a  regular  meeting  of  the  board  at 
least  one  week  before  action  is  taken  thereon. 


APPENDIX.  309 


RULES. 


In  order  that  the  members  may  at  all  times  be  informed 
as  to  the  proper  rotation  or  order  of  business,  and,  partic- 
ularly for  the  convenience  of  the  directors  themselves,  the 
directors  should  adopt  a  set  of  rules  for  governing  the  business 
of  the  association.  These  should  be  prepared  carefully  and 
changed  and  amended  from  time  to  time  as  may  be  found 
necessary  in  order  to  make  them  more  practicable  and  popular 
among  the  members.  Since  such  rules  must  be  arranged 
to  suit  local  conditions  and  circumstances  it  is  not  possible  to 
outline  them  very  specifically  in  a  general  work  of  this  char- 
acter. 

The  object  of  the  business  rules  of  an  association  and 
the  policy  of  the  directors  should  be  to  have  the  business 
so  arranged  that  it  will  run  along  smoothly  and  rapidly  with- 
out friction  or  delay,  so  that  members  may  not  be  annoyed  by 
having  to  wait.  At  the  same  time  the  meetings  should  be  made 
of  as  pleasant  and  sociable  a  character  as  possible  so  as  to  be 
enjoyable  to  members  and  visitors.  Particular  pains  should 
be  taken  by  the  directors  to  make  tlje  meetings  suitable  and 
pleasant  places  for  ladies  to  visit,  for  quite  a  number  of  ladies 
become  members  of  associations. 

A  few  specimen  rules  are  given  below  which  will  be  found 
suggestive  : 

i.  At  the  specified  time  for  the  collection  of  dues  the 
president  shall  call  the  meeting  to  order,  and  the  secretary 
and  his  assistants  and  the  members  of  the  finance  committee 
shall  take  their  respective  places. 


3io  APPENDIX.  . 

2.  The   secretary   or   an    assistant    shall    enter   all  dues 
paid  in  in  the  Dues  Register  and  the  members  of  the  finance 
committee  shall  count  all  moneys  and  receipt  for  them.*' 

3.  When  the  time  for  receiving  money  has  expired  the 
secretaries  and  the  finance  committee  shall  count  the  receipts 
and  check  up  the  books  to  see  if  the  receipts  and  entries  cor- 
respond.   As  soon  as  this  is  done  they  shall  report  to  the  pres- 
ident that  they  are  ready  to  proceed  with  the  further  business 
of  the  evening. 

4.  The  following  shall  be  the  order  of  business  for  the 
directors'  meeting : 

(r)  Call  to  order. 

(2)  Roll  call. 

(3)  Reading  of  minutes. 

(4)  Sale  of  money.! 

(5)  Reports  of  officers  and  committees. 

(6)  Unfinished  business. 

(7)  Miscellaneous  and  new  business. 

(8)  Reports  of  receipts  and  disbursements. 

(9)  Adjournment. 


*In  some  associations  the  rule  is  that  an  assistant  secretary,  or  a  mem- 
ber of  the  finance  committee,  shall  make  the  entries  in  the  Dues  Register, 
and  the  secretary  himself  shall  attend  to  issuing  books  to  new  members 
and  other  miscellaneous  business  of  that  kind,  and  particularly  to  giving 
information  and  answering  the  numerous  questions  that  are  always  being 
asked  by  members  in  an  association. 

During  the  time  of  receiving  dues  the  directors  who  are  not  officers  or 
members  of  the  finance  committee  should  make  themselves  useful  by  cir- 
culating among  the  members  and  visitors  present,   making  them  ac- 
Suainted  with  one  another,  giving  information  in  regard  to  the  associa- 
on  and  its  work,  and  making  the  meeting  as  pleasant  and  attractive  as 
possible. 

tThe  sale  of  money  should  be  placed  as  early  as  possible  on  the  order 
of  business  so  as  not  to  keep  members  waiting  too  long.  The  directors' 
meeting  does  not  begin  until  after  the  time  of  receiving  dues  has  expired. 
Members  who  come  early  in  the  evening,  in  time  to  pay  their  dues,  and 
are  then  compelled  to  wait  until  the  directors  transact  all  other  business 
before  they  can  bid  on  money,  find  the  delay  very  irksome  and  annoy- 
ing. 


INDEX  OF  SUBJECTS. 


A. 

ACCOUNT  BOOKS.  page. 

General  suggestions  concerning, 283 

ADMINISTRATOR. 

May  exercise  same  rights  as  principal, 75 

May  continue  membership  of  deceased  member,. . .     88 

ADMISSION. 

By-law  concerning,         303 

Payment  of  may  be  essential  to  membership,    76 

AGENTS. 

Powers  and  liabilities  of,   129 

AMENDMENTS. 

To  by-laws, 308 

To  constitution,     299 

AMERIKANISCHER  DARLEHEN  UNO   BAUVEREIN. 

First  building  association  in  the  United  States, 25 

APPRAISING  COMMITTEE. 
See  Committees. 

ARTICLES  OF  INCORPORATION  (OHIO). 
See  Incorporation. 

ASSETS. 

Classification  of,   191 

ASSESSMENTS. 

By-law  providing  for  payment  of, 305 

Mortgagors  liable  for  on  mortgaged  property, 150 

ASSIGNEE. 

Of  member  may  exercise  same  right  as  principal,  .  .     75 

ASSIGNMENT. 

Of  stock  to  association,    75 

ASSISTANT  SECRETARIES. 

Employment  and  duties  of,    no 

(3H) 


3I2  INDEX. 

ASSOCIATION.  Page. 

See  Building  and  Loan  Associations. 

ATTORNEY. 

Appointment,  duties,  and  compensation  of,    115 

Form  for  report  of, 271 

AUDITORS  AND  AUDITING. 

Assistance  from  officials 173. 

Certificate,    198 

Change  of, 174 

Compensation  of, 175 

Diagrams, 182 

Disqualification  of, 172 

Errors  of  omission, 181 

False  accounts, 180 

General  considerations,. 157 

Protection  of  corporate  interests, 162 

Purposes  of,   160 

Qualifications  of, 168 

Representative  of  members, i67 

Selection  of,   168 

Special  hints,        177 

Special  reports  of,  192 

Uniformity  of  methods  impossible, 176 

Withdrawals, 189 


B. 

BALANCE  SHEET. 

Form  for, 279 

Nature  and  purposes  of, 166 

BEUZER,  CHARLES. 

Dividend  tables, 242 

BLANK  FORMS. 

Necessity  for, 120 

See  Forms. 

BLANKS. 

See  Account  Books. 

BONDS  OF  OFFICERS. 

By-law  concerning, 301 

Form  for  (Ohio),   260 

Necessity  for  and  amounts  of, 119 

BOOK  ACCOUNT. 

Form   for, 285 


INDEX.  313 

BOOKS  AND  BLANKS.  pase- 

Care  of,      177 

General  suggestions  concerning,  283 

General  Ledger,  190 

Members'  Ledger, 187 

Necessary  for  an  association, 291 

Secretary's  cash  book, 187 

Treasurer's  cash  book 187 

BORROWERS. 

As  members, 89 

Duties  of, 89,  93 

Rights  of, 89,  93 

BORROWING  MONEY. 
See  Loans. 

BROOKLYNER  GEGENSEITIGER  DARLEHEN  UND 
BAUVEREIN. 

Organization  of, 26 

BUILDING  AND  LOAN  ASSOCIATIONS. 

Advantages  of,    21,  28 

As  corporations, 162 

By-laws,   63 

Capital  stock, 61 

Choice  of  name,    . . .  60 

Constitutional  requirements, 62,  164 

Dissolution  of, 132 

Early  history  of, 23 

Economy  and  simplicity  necessary,  165 

Future  of, 33 

General  powers  of, 127 

Government  of,  99 

Headquarters,    . .    65 

How  to  organize, 

Incorporation  of, 

In  the  United  States,    25 

Leagues 45 

Meetings  of. 67 

Members :  duties  and  rights  of, 76 

"  National ",    41 

Perpetual, 39 

Perpetual  succession,       127 

Powers  and  liabilities  of, 127 

Serial,    ... 36 

Special  powers  of, 131 

Statistics  of    i56 

Statutory  requirements, 164 

Terminating, 35 

See  Building  Societies. 


314  INDEX. 

BUILDING  ASSOCIATION  SUPPLIES.  Page. 

List  of,     291 

BUILDING  SOCIETIES. 

Origin  and  growth  in  Great  Britain  and  Germany, . .     18 

BY-LAWS. 

Form  for,    300 

Scope  of,  . .  , 6-* 

See  Rules. 

c. 

CAPITAL  STOCK. 
See  Stock. 

CASH  BOOK  (SECRETARY'S). 

Auditing  of, 184 

Description  of, 187 

Diagram,    .  . '.  188 

CASH  BOOK,  (TREASURER'S). 

Description  of, 187 

CERTIFICATE  OF  PAID-UP  STOCK. 

Cost  of, 303 

Form  for,       272 

May  be  called  in  by  directors,   303 

When  and  to  whom  issued,  303 

See  Paid-up  Stock. 

CERTIFICATE  OF  STOCK. 

Form  for, 287 

COLLATERAL  SECURITY. 

By-laws  concerning, 305 

Character  of,   95 

Insurance  policies  as,  148 

Liability  of, 74 

Sale  and  disposition  of, 96 

Stock  as, 96 

COMMITTEES. 

Appointment  of,         302 

Appraising,  duties  of, 97,  302 

Auditing,  duties  of, 156,  176,  302 

Compensation  of,    302 

Finance,  duties  of, 302 

CONSTITUTION. 

Form  for, 297 

Scope  of,   62 

See  Rules. 

CONTINGENT  FUND. 
See  Reserve  Fund. 


INDEX.  315 

CONTRACTS.                                                                           Pa*e- 
Powers  and  liabilities  of  association  in 129 

CONTRIBUTION  BOOK. 

Diagram  (13  week), 185 

Diagram  (12  month), 186 

CO-OPERATION. 

Abroad, 18 

Defined,   15 

In  the  United  States,  19 

Necessity  for, 45 

CO-OPERATIVE  SOCIETIES. 

Conditions  necessary  for, 16 

History  of, 15 

In  England  and  Germany    18 

In  the  United  States, 19 

Origin  of, '. 15 

Varieties  of, 17 

CO-OPERATIVE  STORES. 

Plan  of,  17 

CORPORATE  MEETING. 

Character  and  powers  of, 99 

General  meetings, 100 

Management  of, 102 

Special  meetings, 101 

CORPORATE  SEAL. 

Description  and  purpose  of, 128 


D. 

DAVIS,  W.  L. 

Dividend  tables, 200 

DECEASED  MEMBERS. 

By-law  concerning, 308 

Disposition  of  stock  of, •  88 

See  Administrator. 

DEFAULTERS. 

Entitled  to  certain  credits, 74 

DEPOSIT  ENVELOPE. 

Form  for, 288 

DEPOSITORS. 

As  members, 76 

DEPOSITS. 

Table  of, 138 


3i6  INDEX. 

DEPOSIT  SLIP.                                                                         Page. 
Form  for, 289 

DIAGRAMS. 

Cash-book 188 

Individual  Shareholder's  Ledger, 183 

Secretary's  Contribution  Book 185 

DIRECTORS. 

Duties  and  responsibilities 78,  84,  90,  95, 

96,  104,  in,  113,  119,  120,  121,  122,  129,  299,  301,  304,  306 
Pay  of 122 

DISSOLUTION. 

Conditions  and  methods  of, 132 

Constitutional  provisions  for,  300 

DIVIDENDS. 

By-laws  concerning, 307 

Calculation  of, 197 

Form  for  envelope  for, 151 

Form  for  receipt  for, 152 

Form  for  warrant  for, 152 

Must  be  allowed  to  withdrawing  members, 308 

On  paid-up  stock, 303 

Payment  of  discussed, 150 

Payment  of,  on  advanced  dues, 77 

Provisions  for  in  statutes  and  rules,     84 

Tables  of— System  1 200 

Tables  of— System  II,  225 

Tables  of— System  III, 242 

DUES. 

Accumulated,  may  be  credited  on  loans 74 

Arrangements  for  receiving  of, 153 

Back  payments  not  required,         76 

Begin  from  time  of  subscription, 76 

By-law  concerning  payment  of, 303,  306 

Defaulters  entitled  to  credit  for  accumulated,   ....  74 

Definition  of,   70,  84 

Form  for  deposit  envelope  for,     288 

Form  for  deposit  slip  for, 289 

Form  for  receipt  for, 288 

May  be  collected  by  suit,   74 

May  be  paid  in  advance,                 77 

Not  to  be  credited  as  paid  upon  loans, 74 

Regular  payment  of  essential,   78 

Stock  liable  for, 74 

DUES'  BOOK. 

See  Contribution  Book  (Secretary's.} 


INDEX.  317 

K. 

ELECTIONS.  Pa*e- 

Constitutional  provisions  for,  106 

General  discussion  of,  106 


EXECUTOR. 

See  Aministrator. 


K. 


FEES. 

Admission, 76,  3°3 

Deposit  for  required, ....    3°4 

For  cancelling  mortgage, 307 

FINANCE  COMMITTEE. 
See  Committees. 

FINES. 

How  and  for  what  imposed, 78 

FORECLOSURE  OF  MORTGAGE. 

Disposition  of  proceeds,  96 

FORFEITURE  OF  STOCK. 

Conditions  of, 78 

FORMS. 

For  Articles  of  incorporation  (Ohio),  257 

For  attorney's  report, 271 

For  bond  of  officers,  (Ohio), 260 

For  book  account, 285 

For  certificate  of  paid-up  stock, 272 

For  collateral  note  for  pass-book  loan, 270 

For  deposit  envelope, 288 

For  deposit  slip, 289 

For  dividend  receipt, 152 

For  dividend  warrant, 152 

For  mechanic's  lien  (Ohio), 270 

For  mortgage  clause  for  insurance  policies, 267 

For  mortgage  collateral  note, 269 

For  mortgage  (Kentucky), 264 

For  mortgage  (Ohio), . 261 

For  pass-book,   287 

For  proxy  on  stock 259 

For  recording  and  cancelling  of  mortgage, 146 

For  relinquishing  insurance  policy, 149 

For  report  of  auditing  committee, / 193 

'  For  secretary's  balance  sheet, 279 

For  stock  subscription  list, 259 


3i8  INDEX. 

o. 

GENERAL  MEETINGS. 

See  Corporate  Meeting. 

GENERAL  POWERS. 

Of  associations, 127 

Of  officers, 106 

ti. 

HEADQUARTERS. 

Selection  of, 65 

I. 

INCORPORATION. 

Form  of  article  of  (Ohio) , 257 

Methods  of, 64 

INSURANCE  POLICIES. 

As  collateral  security, 148 

By-laws  concerning, 305 

Filing  of,         . .        148 

Form  for  relinquishment  of, .  149 

Premiums  on  must  be  paid  by  mortgagors, 148,  305 

Recording  of, 148 

INTEREST. 

By-laws  concerning, 304,  305 

Calculation  of,   197 

Nelson's  method  of  calculating,  250 

Tables, 201,  226,  244,  252 

INVESTORS. 

Rights  of, 83 

K. 

KOERNER,  GUSTAV. 

Gives  origin  of  buiding  associations  in  United  States,    25 

L. 

LEAGUES. 

How  to  form, 46 

Membership  in, 48 

National  league,    50 

Necessity  for, 45 

LEASEHOLDS. 

Recording  of  when  mortgaged, 150 

Work   of, 47 


INDEX.  319 

LEDGER  (MEMBER'S).                                                        Page- 
How  to  check, 187 

LEGISLATION. 

In  England, 53 

In  the  United  States, 56 

Necessity  for, 57 

New  effects  of, 67 

LIABILITIES. 

Classification  of,  191 

LIEN. 

Form  for  mechanic's, ...    270 

On  stock  for  arrears, 74,  78 

LITIGATION. 

Camses  of, 57,  130 

See  Suits. 

LOANS. 

Accumulated  dues  applied  to  payment  of, 74 

Advantages  of, 143 

Amount  of, 87,  135,  304 

By-laws  concerning, 304 

Cost  of, 136 

For  what  purposes,     135 

In  installments,  137 

Interest  on, 304 

Nature  of, 90,  92 

Premium  on,  304 

Purposes  of,  135 

Repayment  of,  137 

Security  required,  136 

Tables, 138 

The  time  required  for  payment  of, 138 

Who  may  borrow, 134 


M. 

MECHANIC'S  LIEN  (OHIO). 

Form  for, 270 

MEETINGS. 

Business, 67,  302 

Constitutional  provisions  concerning, 298 

Corporate, 99 

Directors', 299 

General, TOO 

Special, 101 


320  INDEX. 

MEMBERS.  Pa&e- 

Classes  of, 75 

Corporate  rights  of, 81 

Duties  of,  77,  89 

Protection  of,     163 

Relations  of  to  association,   81 

Rights  of  as  borrowers,   t    87 

Rights  of  as  investors, '    83 

Withdrawal, 84 

MEMBER'S  BOOK. 
See  Pass  Book. 

MEMBERSHIP. 

Conditions,  purposes,  privileges,  and  liabilities  of, .  76,  77 
Constitutional  provisions  for, 297 

MORTGAGE  CLAUSE  FOR  INSURANCE  POLICIES. 

Form  for,   267 

MORTGAGE  COLLATERAL  NOTE. 

Form  for,   . 269 

MORTGAGE  (KENTUCKY). 

Form  for, 264 

MORTGAGE  (OHIO). 

Form  for, 261 

MORTGAGES. 

By-laws  concerning, 304 

Cancelling  of,             147 

Custody  of,   146 

Foreclosure  of  and  disposition  of  proceeds, 96 

Forms  for  recording  and  cancelling  of, 146 

On  leaseholds,             150 

Purpose  and  features  of, 94 

Recording  of, 146 

MORTGAGORS. 

Duties  of,  150 

MUTUAL  HOME  AND  SAVING  ASSOCIATION,  THE, 
DAYTON,  OHIO. 

Report  of. 281 

N. 

NAME. 

Choice  of, 60 

Constitutional  provision  for, 297 

NELSON,  R. 

Method  of  calculating  interest,  250 

"New  Bookkeeping", 283 


INDEX.  321 

o. 


OFFICERS. 

Bonds  of,  ..........  ..............................  119 

By-laws  concerning,  .......        .....................  300 

Constitutional  provisions  for,  ....................  299 

Election  of,         ..........................  ...   104,  106 

General  powers  of,  ..............................  104 

Re-election  of,  ...............  ....................  107 

Remuneration  of,     ...............................  120 

Responsibilities  of,  ..............................  119 

Selection  of,       ........................    .....  65 

•    Those  required,  ...............................  ...  106 

ORGANIZATION. 

By-laws,  ........................................  63 

Capital  stock,  ...................................  61 

Choice  of  name,  ..................................  60 

Constitution,  ................................  .....  62 

Headquarters,  .............    ......................  65 

Incorporation,  ....................................  64 

Meetings,  .  .    ........................  .  ...........  67 

Officers,  ..........................................  65 

Preliminary  steps,  ..............................  59 


PAID-UP  STOCK. 

By-laws   concerning,  ........................  ....  303 

Defined,  .......................................  71 

Form  for  certificate  of,  ...........................  272 

Liabilities  concerning,  ...........................  153 

Table  :   time  required  to  pay  up  share,  .............  141 

When  certificates  of  may  be  issued,  ..............  71,  77 

PASS-BOOK. 

Cost  of,  .............   ..............................  303 

Description  of,  ..................................  .  .  286 

Forms  for,  ......................................  287 

Possession  of  essential  to  membership,  ............  76 

Prima  facie  evidence  of  membership,  ..............  77 

PERPETUAL  ASSOCIATIONS. 

Plans  and  advantages  of,  .........................  39 

PERPETUAL  SUCCESSION. 

Essential  to  purposes  of  associations,  ............  127 

PREMIUMS. 

By-laws  concerning,  ............  :  .................  304 

Definition  and  purpose  of,  ........................  91 


322  INDEX. 

PRESIDENT.  Page. 

Duties  of, 108,  146,  300 

PROFITS. 

Application  of, 198 

Disposition  of  undivided,   145 

Illustration, 193 

See  Dividends. 

PROXY  ON  STOCK. 

Form  for, 259 


R. 

REAL  ESTATE. 

Appraisement  of, 97 

RECEIPT  BOOK. 

See  Pass  Book. 

REPORTS. 

Form  and  preparation  of,   273 

Legal  requirements  concerning, 275 

Preparation  and  publication  of, 277 

Secretary's  duties  concerning, 278,  301 

Specimens, 280 

REPORTS  (SPECIMEN). 

Mutual  Home  and  Saving  Association,  The,   Day- 
ton, Ohio, 281 

Seventeenth   Ward  Building  and  Loan   Company, 
The,  Cincinnati, 282 

RESERVE  FUND. 

Nature  and  purpose  of, 144,  303 

RULES. 

For  order  of  business,  form  for, 310 

For  directors'  meeting, 309 

Must  be  explicit, . .  57, 62,  63, 70, 74, 78,  84,  85, 87,  90, 92, 
94,  96,  101, 102, 104,  106, 108,  in,  120,  121, 122,  127,  129,   131 
See  By-laws  and  Constitution. 


s. 

SALARIES. 

Of  officers, 118,  120,  122,  125,  301 

SALE  OF  MONEY. 

Purpose  and  manner  of, 90,  304 

SALE  OF  SECURITIES. 
See  Security. 


INDEX.  323 

SCHMOELE,  DR.  WILLIAM.  Page. 

Founder  of  building  associations  in  the  United  States, ...     25 

SECRETARY. 

Duties  of, 109,  148,  150,  277,  301 

Salary  of, 1 25 

Subject  to  fine, 306 

See  Assistant  Secretaries. 

SECRETARY'S  BOOK. 

See  Cash  Book  (Secretary's.} 

SECURITY. 

Assignment  of  stock  as, 96 

By-laws  concerning, 304 

Collateral, 95 

Mortgages  as, 94 

Nature  of, 135 

Sale  of  and  disposition  of  proceeds, 96 

See  Mortgages. 

SERIAL  ASSOCIATIONS. 

Described, 36 

Division  of  profits  in, 253 

SEVENTEENTH  WARD  BUILDING  AND  LOAN  COM- 
PANY, THE  CINCINNATI, 

Report  of, 282 

SHAREHOLDERS. 

See  Members. 
SHARES. 

See  Stock. 
SIMPLE  INTEREST. 

See  Interest. 
SMITH,  HENRY  L. 

Dividend  tables, 223 

"SPARKASSE." 

Reference  to, .  .     18 

SPECIAL  MEETINGS. 

Provisions  for, 101,  299 

SPECIAL  POWERS. 

Of  associations, 131 

STATE  SUPERVISION. 

Necessity  and  provisions  for, 195 

STATISTICS. 

Estimates,     156 

Necessity  for 52 

Provisions  for, ] 195 


324  INDEX. 

STOCK. 

Amount  of, .  .  61,  297 

Amounts  of  held  by  one  subscriber,  68,  297 

As  property, 69 

Assignment  of  as  collateral  security, 96 

By-laws  concerning. 303,  307 

Constitutional  provisions  concerning,   297 

Definition  of,   68 

Dues  on,   70 

First  liability  falls  upon, 74 

Forfeiture  of, 78 

Forms  for  subscription  list  for, 259 

Form  for  transfer, '.    287 

Increase  of, 69 

In  perpetual  associations, 39 

In  serial  associations, 36 

In  terminating  associations,   35 

Liability  of  for  loans, ....          74 

Miscellaneous  facts  concerning,   74 

Paid-up, 71,  77,  141,  153,  272,  303 

Reversion  of  to  association, 307 

Subject  to  lien, 74,  78 

Subscription  to  necessary  before  incorporation ....  68 
Table  snowing  time  required  for  maturing  of,    141,  142 

Transferable, 70 

Transfer  of  upon  books  of  association,   303,  308 

STOCK  BOOK. 

See  Dues  Book  and  Pass  Book. 

STOCKHOLDERS. 
See  Members. 

STOCK  PAYMENTS. 
See  Dues. 

SUBSCRIPTION  LIST. 

Form  for, 259 

SUITS. 

Powers  and  liabilities  of  associations  in,   130 

See  Litigation. 


T. 

TABLES. 

Deposits,    138 

Dividends, 197 

Interest, 197 

Loans, 138 


INDEX.  325 

TAXES.  Pa*e- 

By-law  providing  for  payment  of, 305 

Mortgagor  liable  for  on  mortgaged  property,   . 150 

TERMINATING  ASSOCIATIONS. 

Plan  and  disadvantages  of, 35 

TITLES. 

Fees  for  examination  of, 304 

TRANSFER  OF  STOCK. 
See  Stock. 

TREASURER. 

Duties  of, no 

TRUSTEES. 

Duties  of, 113 

U. 

UNDIVIDED  PROFITS. 

Disposition  of, 145 

UNION  BUILDING  SOCIETY,  GREENWICH,  ENGLAND. 

Allusion  to, 53 

V. 

VICE-PRESIDENT. 

Duties  of,   108 

w. 

WITHDRAWAL. 

By-laws  concerning, 307 

How  to  check  up,  189 

Right,  conditions,  and  method  of,  84 


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